The Washington times., 1912-08-04
BULLS AND BEARS PLAY THE GAME
FORMER HAVING THE ADVANTAGE
Earnings Harvested Rpenng
and General Improvement In Railroad Earnings and Business
Factors That Now Dominate
BY JOHN GRANT DATER.
Special Financial Pabiicstons


present, however, the firming up, Of
money seems merely in the inception,
increased commercial activity and 70
harvest demands, both of which pid
fair to continue and grow stronger,
sact a stock business and increasingly
hazardous for public speculation,
would seem like counting trouble 10 at-
tempt such movement at this time. :,
street may So se ans as %aaS SrS IN
tory reports Of general business and Az
favorable statements Of railway earn
ings would seem to indicate that tne
community 'is not disturbed by tho
ally no assurance on that point as yet.
and II there were there appears fully
as much IL not even greater need TOT
caution In making speculative commit
ments. 1t seems apparent that the har-
vest demand will be heavy and In the
event that merchants and manufac-
turers are not disturbed, or do not
slow down the commercial demands
for money will be the greater. Recent
tendencies in the market for time loans
and commercial paper show that the
banking surplus is none too abundant
to meet legitimate business demands
and IL the merchant requires his money
for business, the bank cannot loan II
to the broker for use In speculative
ventures.
Extensive Commercial Borrowing.
without doubt, the overshadowing
topic In banking circles during the
week, was the activity which has
sprung up In commercial borrowing.
Commercial paper the best names In
the country, was offered In Increasing
~ large amounts and at the increasing
ly attractive rates of to 5h per cent
90 oh fpttr m al oin
names, and 5h to 8 per cent for names
not SO well known. This demand in
turn reflected upon the time money
market, when rates advanced from Y
to " per cent for all maturites, closing
at abou. 3h per cent for sixty days,
3% to per cent for ninely days. ~
per cent for four and Ave months and
s per cent for six months, with virtual
year at q better rate than per cent.
except to borrowers of excestionai
character or on very choice collateral
such as all dividend paying rails.
In some quarters, of course. It Is al
legged that the banks are OVERRIDING the
matter of maintaining time rates 30
firmly at quotations which have been
reached by rapid advances, and the
point is made that time money ought
call loans ruling at 2h to IN per cent
but bank officers assert that the sup
plies are not abundant and that their
advices from the interior all indicate a
heavy autumn demand for crop moving
purposes. Wall Street is In part re-
sponsible for the position in which 1t
finds itself, for the dullness of business
induced countless brokers to pay of
time loans and borrow on call. In the
meanwhile the signs of awakening bust
int rfat nuin m q
and 1t is a matter OF common notoriety
that mercantile community as class
are very much better provided with
funds than the Wall Street borrowers
Governor Wilson's Tariff Views.
As a feature OF the increasing tension
In the money market, sterling exchange
broke sharply and short term notes
ruled strong. The former was the direct
result of extensive offerings of finance
bills by foreign bankers, who were ar
ranging loans for brokerage houses.
selling their demand or sight sterling
bills and contracting to provide the bor-
rover with a cover at maturity in the
form of a cable transfer. These loans
were made in many instances at a fixed
rate per cent, the borrower taking no
chances with the fluctuations Of ex-
change, as is frequently the case. The
decline in short term notes was attri-
buted. naturally, to the sales Of banking
Institutions to put themselves in funds.
As an incident to the monetary situa-
ton, II may be said that a theory Is
gaining currency. that the sudden tran
sition from apparent great case to incl
pient stringency Is due In part to a
locking up of funds in new industrial
and public service company fiotations.
which have been going on all over
| the country during the last eighteen
months or SO.
To what extent the Improvement in
Wall street last week was due
| to the report that Governor WI.
| son In his letter of acceptance
| would not advocate any sudden
and radical revision of the tariff, bu,
| graudal changes. such as would no,
| seriously disturb business interests, Il
is difficult to say. 1t was certainl!