The Birmingham age-herald., 1913-06-22


the hospitals the country through are
filled with myriad of men financially
mutillated.
McAdOo Caused 1t
The change in the tone of the market
dates from the unexpected and placid
announcement by Secretary of the Treas
ury McAdoo that he was custodian OF 4
treasury reserve fund of $500, ,0O0 600, cre-
ated for the salvation against pancs. He
called attention to the fact that he had
authority to issue the entire amount IL
the occasion should arise, or any part of
it, borrowers being only required to put
up good collateral and pay per cent
for the accommodation.
The country at large and half the bank
ers had forgotten all about this Aldrich
provision against financial convulsion.
The bankers were keeping quiet about
this enormous salvation fund They had
plenty of money on hand, but were Civ
ing open and sombre currency to dark
talk about tight money" and the need
of excessive caution in making loans.
Frightened borrowers were only too will
ling to pay liberal Commissions for
back door accommodations. and for weeks
there were fat pickings for none too
scrupulous corps of brokers of influence
in shylock manipulation. The practice
had grown to the proportions of a greedy
scandal and threatened the safety of the
financial situation. The scare, which had
been developing for weeks and going
from bad to worse, to the expressed con-
sternation of the leaders. was becoming
genuinely very, very serious, and the
street looked in vain for succor in quar-
ters where it should have been offered.
Had Not Given Him a Thought
And then 10! Upon the stage sauntered
the quiet and homely figure OF Mr.. Nc
Adoo, Secretary of the Treasury. The
great bankers and their allies had not
given Mr.. McAdoo a thought Who was
McAdoo, what did he know about hidden
and forgotten national finances? Least
of all what did he know about hidden and
forgotten treasury resources, and the
uses for which they were created. 1t de-
veloped, however, that in the construction
of a $75,000,000 tunnel under the Hudson
river and sections of New Jersey and
Manhattan, he had acquired several of
the rudiments for his education and the
great truths he had obsorbed were not
forgotten.
He didn't have to dig far to uncover
that s500,000,00O and recall its existence
and purpose, to the recollection of the
multitudes. The resurrection of that half
billion dollar asset was as effective a
witnessed in years. The entire absence of
fireworks blinded the audience for a time
to the significance and Importance of the
play. but when the bankers began TO
squrm and scream about the blunders OF
the tunnel digging financier, transplanted
from the Jersey swamps to the manage
ment of Uncle Sans treasury, the mean
ing and magnitude of the move struck in
Wall street the big bankers excepted
DOarSa n a <
and satisfaction
interest rates have been sliding down
steadily for fully a week. Money is being
placed generously within easy reach of
borrowers. They are told that the finan-
clal stringency has relaxed and that un-
limited capital at IA TO 21a per cent could
be had on call, and to Az per cent on
time. 1t filled the bankers with rare Joy
CD to feel that conditions had suddenly
improved and that 1t was once more in
thelr power to accommodate legitimate
demands. The panic mills ceased grind
ing, the tumult OF approaching disaster
changed to inspiring music, sunshine SUI
perseded darkness, market tempera lr1enr
was transformed from gloom to cheerful
ness and Wall street once more smiled
bloadly Prices doomed in every quarter.
put nothing bopmed in comparsoS with
"McAdoo preferred"
Contrast in Sentiment
Inc literature that pours from broker
age off1ces is In pleasing and sudden con-
trast to the funeral outflow of the preced-
ing four or five months The sharp
chanSe In market temperament was sem
sational. 1t was unbelievable for a time.
out as day after day registered further
continuation OF the recovery confidence
returned. Men who were afraid to buy at
the bottom, took hold eagerly and fear
lessly to Z points higher and felicitated
themselves on having at length mustered
courage to attack the bargain counter
ms peculiarity of the gambling and m
Vesting mind is familiar to Observers and
creates no surprises. The feeling still ex-
lists, however, that the recovery is only
ally. to be followed by a break that
VIII crush quotations to new low levels
eopment is looked for
after every additional fractional or fun
y.~...vnt. AS fresh high ground
is made speculation and investment broad
ems, and the public pays the bankers and
insiders profits on mountains of securi-
ties bought at various stages of the de-
preston to save the situation'-a recur-
ring experience to every notable market
movement
The record of the fiscal year 1928, end.
ing June 80 next will be an irrefutable
answer to the ceaseess refrains of the
calamity howlers. Business has been
steadily expanding, despite the claims of
the grief stricken prophets of evil. For
the moment there Is slight recession in
some industrial quarters that will be di-
rectly affected by tariff rev sin, j.
gross volume of business, taking the coun-
try as a whole, is eminently satisfactory