Evening star., 1914-10-04

Ior tnat purpose. This had already been
done for bonds, and the success which
has attended these efforts has led to a
similar process being effected for the reg
ularly listed stocks as well. This 10. Of
course, long way removed from a free
market. but It is a long step in the right
direction. and is a wise preliminary to
the full resumption Of unrestricted trad
ing.
transactions Supervised.
Close supervision has of necessity been
made of every transaction, in which there
was price concession. by committees
appointed for the purpose. The work has
progressed smoothly, without causing dis
turbance of collateral behind bank loans
and without bringing forth any substan-
tial efforts toward security liquidation as
far as has been made known by the au-
thorities. The removal Of the embargo
on general trading in listed stocks was
held to be practical because Of the sta
bility OF market conditions, and logical
because OF the successful efforts made in
other lines.
1t is probable that the committee Of
five, with the clearing house committee,
will continue the oversight of transac-
t1ons at concessions that they have MAIN
tanned over purchases and sales at fixed
prices. They will scrutinize orders which
are below the former market level and
|
new medium to present daily records of
business done. In this way quotations
may be controlled until such time as the
international financial markets warrant a
strictions.
1t should not be forgotten that the
business community in every part of
the United States. from the smallest
interest in the resumption Of trad
ing In securities. for SO long as the
market for stocks and bonds are re-
strained loans cannot be made on them,
not liquid. That fact stands in the
way OF free flow of credit. and that
has Its disadvantages for all classes
OF borrowers, and is not confined to
borrowers on stocks only. There is now
no call money market, and there can
be no call loans on stocks without q
market in which stocks can be liqui-
dated il need be.
country the call money market has
been an important element in the bank
ing machinery, and the sudden stop
page of that part Of the machinery has
system. felt more in some parts of
II than in others, but influencing it all.
The effort to resume trading in stocks
and bonds. therefore. Is by no means
srettable that we have not had a
call money market based on commercial
collateral instead of on corporation Sc
curities. but in the absence of that the
stoppage of call loans on stock ex-
change collateral has resulted in the
Withholding from the market Of funds
whose employment would in turn have
released other funds for commercial
uses. In due time under the operation
of the federal reserve bank system
there should be established a market
for call loans secured by bills, which
for the investment of bank funds would
be preferable to call loans on securities.
Foreign Relationships the Problem.
The darkest cloud overhanging the
financial horizon has, Of course. been
the foreign exchange difficulty, and even
with the assurance of the success of the
$100.000.000 gold pool, foreign exchange
rates have refused to recede to any
thing like a normal basis. Yet it is
automatic that business conditions in
the United States will not assume nor
NAL conditions until the early estab-
lishment of better conditions in the ex-
port trade. Leading bankers are Of the
opinion that the high exchange rates
are due to Developments tending to-
ward a resumption Of normal business
and financial, conditions in Great Brit
ain, the effect Of which on the United
States must ultimately prove helpful
in an important degree. A definite date
has been fixed for the termination of
the British moratorium. and to this
fact is chiefly attributed the rise in ex-
change from the sharp break which oc-
CURED at the time when the New York
city financing was arranged
There are great many people on
in London who took advantage of the
moratorium until a date for its termi-
nation was fixed. but who have since
been endeavoring to obtain cover for
their indebtedness in the United King
| dom. The moratorium. so far as it
| relates to debts in retail trade. and
bills Of exchange other than checks
| and bills on demand. will be termi-
mated October 4. and the general
moratorium will end November 4. 1t
is with the earlier date that Americans
having obligations to meet abroad are
chiefly concerned. The difficulty in OBJ
tanning supply of exchange to meet
the demand for the covering of obli-
| of the moratorium, has been rendered
more trouble some, as grain exports
have fallen on recently and shipments
of other kinds have not SO far attained
sideration is. however. that it is a con-
structive development which has
caused the rise In exchange that has
worried SO many people.
Cotton Fear Subsidies.
Some encouraging cotton reports
have come from the cotton states, indi-
eating that the fear of disaster is grad
ually becoming minimized, due to the
prompt action on the part Of the bank
| ers and commercial organizations in
that immediate territory. as'well as to
the good effect Of the "buy-a-bale'
| movement, which had its conception In
| Atlanta. but which has spread to every
part OF the country and has been al
| reported that cotton is beginning to
move abroad steadily from the south
| ern ports. particularly from Galveston
The movement is very small as yet. but
try indicate that the English demand
| is beginning to reassert itself, anr
| there is more than a distinct hope that
| within thirty days conditions in ths
| south VIII be partially relieved by ci