The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1913-04-21
A BUSINESS REVIEW OF THE
PAST WEEK BY HENRY CLEWS

NEW YORK, April 21,-The con-
trolling influence in the stock market
is the money situation. By this is
meant not SO much the lack of ordi-
nary loaning facilities, as serious in
roads upon the available supply of cap
ftal. There is plenty of what is techni-
cally known as money in the country,
but the demands for both credit and
capital have been extraordinary for
several years. This is worldwide
phenomenon. International trade has
been running upon an unprecedented
scale. Industrial development has pro-
crossed marvellously in all parts of
the world, and the strain upon capital
thus induced was seriously aggravat-
ed by the losses and hoardings of the
Balkan war. We have been turning
capital, which comes from savings
only, from fluid into fxer forms with
excessive rapidity; the result being
temporary scarcity and high rates. In
the United States the situation has
been aggravated by home conditions.
Trade was very active, and there fol-
lowed a considerable expansion Of
credit. The home requirements for
capital have been enormous. They
have been held in restraint somewhat
by recent high interest rates; the u.s.
ual warning against excess. 1t is well
known that many important issues are
still pending for industrial, railroad
and municipal or State purposes.
These high rates forced a readjust-
ment of market values to new condi-
tions, and the low rates at which some
of the new issues, notably st. Paul and
Baltimore and Ohio, have been placed
focused public attention upon the diff
flculties of the situation.
How far this readjustment 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 eased considerably
since the close of the Balkan war. The
reduction of the Bank of England rate
was an encouraging event, and point
ed the way toward easier conditions.
1t is probable also that some relief will
come from the release of European
hoardings which accompanied the war.
In fact any serious strain here should
invite relief from Europe in a double
form-irst, in preventing excessive in
terest rates on this side, and, second,
in developing better demand abroad
for American securities. Gilt-edged
bonds and stocks are now selling at
tempting rates to the conservative in
weston. There is no doubt that a very
considerable percentage of such Is
now being 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 not shaken foreign confidence in
the United States, but rather strength
ened it. Opinion seems somewhat di-
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 scruti-
niZing loans with more care than I'M
ual, and the immediate tendency is to-
ward contraction. Although collections
are slow, there are no indications of
any serious trade reaction-nothing
more than a general slowing down.
The most important factor in the mon