Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1911-05-08
HENRY CLEW'S FINANCIAL
Review.

COndltlOnS underlying stock eX
change securities, unlike those attend
ing mercantile and industrial activi.
ties, are showing gradual improve
ment. These cross currents at the
moment are to some extent natural
since in both instances they bear Cli.
rectly on the supply of money and the
channels in which money can be EN-.
ployed. Because our merchants and
manufacturers are not requiring their
usual volume of working capital and
banking facilities in their own spec
ial lines. money is accommodating at
an exceptionally active rate. Some
other profitable use must therefore
be found for this great accumulation
unless the owners of the funds are
willing that they shall remain idle
and in turn unremunerative. The
latter would be entirely repugnant to
all precedent. In normal times people
with money seldom allow it to re-
main idle; the natural course is to
seek the securities markets. In this
connection it is worth while recalling
that surplus reserves of our Clearing
house banks. if we exclude the alb
normal year of 1908 that followed the
financial upheaval of 1907, are the larg
est held in this season of any year
Since 1898, amounting to $40.683,175.
A year ago, the corresponding sur.
plus reserve was only $6,771 $50.
What are usually spoken of as the
floating supplies of securities are now
very largely in strong hands. There
has. however, for some time been a
gradual accumulation of dividend pay
ing stockss and particularly bonds,
by smaller interests who have decided
to use their money in this, the only
channel that now appears available.
1t is not only the buying side of the
that should receive con.
sideration in this connection. Buying
advances prices, but when
as at present there is an indisposi-
ton to sell, that feature adds many
fold to the stimulative efficiency Of
the demand. Money is so superabun.
dant at the present moment that not !
only is there no inducement to sell,
but distinct encouragement exists to
refrain from selling securities, as it |
is freely recognized that it would be
to utilize the proceeds to
advantage. Banks and trust compan-
les which allow interest on deposit |
do not. for instance, pay anything |
like the returns that are now avail. |
able from equally safe Investments |
in seasoned and safe securities. 1t |
will thus be seen that the money sit
uation remains fundamental feature |
of strength in the stock market stu. |
alton.
Other influtnces tho more or less
are not sufficiently strong.
in my opinion, to counteract this fun
damental feature of strength that has
been mentioned. The Trust
decisions are. according to the best
opiaion available, to be handed down
on May Is. II not promulgated on
that date they cannot be announced
until May 20, for the Supreme Court
will take a fortnight's recess on May
Is. Furthermore. should further de
lay take place it will have to be until
the October term of the supreme
bench. These trust cases have for so
long a period been the source of such
intermittent unrest in the stock mar
ket that their ultimate influence is
probably greatly overrated. Com
ments by Mr.. Justice Holmes in a re-
cent decision involving another ques-
ton suggest that he ia still in the
minority on trust and trade combin.