The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1913-04-22
THE n MARKET.

THE MONEY MARKET.
The articles sent out weekly by
Henry CleWs. the New York banker,
on current financial conditions. are
instructive and valuable. Their auth
or is in touch with h great move
men,s which tend to affect the price
of stocks and bonds, the movements
of commodities. the rate of interest,
and all the other things which enter
into our financial situation. In his
current letter Mr.. Clews says among
other things:
5... The STORYTELLING influence in the
stock market is the money situation:
by this is mean not go much the lack
Of ordinary leaning facilities. as scri-
GUS inroads upon the available supply
of capital. There is plenty of what
is technically known as money in the
country, but the demands for both
credit and capital have been extraor-
binary for several years. This is a
NOTlu.NlOe 4uSuSitiSllO4s 41ANSi u
ationalo trade has been running upoA
an Unprecedented scale. 1ndustr46f
development has progressed marvel
lously in all parts Of the world, and
the strain upon capital thus induced
was seriously aggravated by the losses
and hoardings of the Balkan war. We
have been turning capital, which
comes from savings only. from fluid
into fixed forms with excessive ra-
pidity; the result being temporary
scarcity and high rates. In the United
States the situation has been aggra-
waited by home conditions. Trade was
very active, and there followed a con-
siderable expansion of credit. The
home requirements for capital have
been enormous. They have been held
in restraint somewhat by recent high
interest rates; the usual warning
against excess. 1t is we'll known that
many important issues are still pend
ing for industrial. railroad and mu-
nicipal or state purposes. These high
rates forced a readjustment of market
values to new conditions, and the low
rates at which some of the new issues,
notably st. Paul and Baltimore "&
Ohio, have been placed focused pub
lie attention upon the difficulties Of
the situation.
How far this rcadjusting process
will go. it is somewhat premature to
say. but unless money becomes cheap
er it is possible that bonds may sell
at still lower prices. AT the moment
it. looks AS if some relief would come
later on from Europe. The monetary
situation there has eascd considera-
bly, since the close of the Balkan war.
The reduction Of the Bank of Eng
land rate vas an encouraging event,
and pointed the way toward easier
conditions. 1t is probable also that
some relief will come from the re-
lease of European hoardings which
accompanied the war. In fact any
serious strain here should invite re-
lief from Europe in a double form
: first, in. preventing excessive interest
rates on this side. and, second, in DE-
reioping a better. demand abroad for
American securities. Gilt-edged bonds
and stocks are now selling at tempt
ing rates to the conservative investor.
There is no doubt that a very consid-
cradle percentage Of such is now be-
ing quietly absorbed. Europe has the
advantage over us in taking a long
distance view of our affairs. and is
showing particular confidence in our
future. Tariff revision downward has
no shaken foreign confidence in the
United States, but rather strengthen
ed it. Opinion seems somewhat d.
vided as to the duration of present
high interest rates. There will be no
difficulty in meeting legitimate trade
requirements during the next few
months, and comparatively easy rates
may be expected until crop demands
begin. The banks are just now
scrutinizing loans with more care than
usual. and the immediate tendency is
toward contraction. Although collec-
tions are slow, there are no indica-
tions of any serious trade reaction
nothing more than q general slowing
down. The most important factor in
the money market is the pressing de-
mand for new capital. 1t is often as
serted that the national extravasancc
OF the last few years has materially
lessencd the sums available for new
investments. This is probably true.
but 1t should be remembered that
general business has been very prof
liable. dividends have been well sus.
tanned, or increased. and the growth
at industry has materially increased
the national income and savings. So
that 1t is doubtful If there is any real
scarcity in the supply of capital, and
it Is chiefly the insistency OF new de-
mands which enables it's owner to
command such high rates"
VEHEc VATyYUS m Hs1~r-r