The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-01-25
SUDDEN EXPANSION
NOT COUNTED UPON
Good Deal of Business Wrcckagc
Must Go Ere Prosperity
Comes.
DECLINE IN INTEREST RATES
Various Incidents OF Encouraging
Nature Tend to Modify
Pcssimism.
ny Is. c. Forbes.

New lOrk. january -i.-l'on i't
enthusiasm run riot.
Wall Street is rejoicing over fne
rise in the price OF securities and n
fall in the cost of money here and
abroad Having repeatedly declared
that stocks were intrinsically cheap, /
am glad the turn has come.
But let me caution business men
that tho most powerful financial inter
ests are not counting upon any sudden
expansion in industry.
They regard the sharp decline In in
terest rates all over the world as sig
nifcant, not so much of a universal.
revival of confidence as of receding
trade.
Why Is money now unlcndable ut the
rates recently current? Why have the
Bank OF England. the Imperial Bank of
Germany and half u dozen other Eu-
ropean banks reduced their discount
rates. And why is idle money piling
UP phenomenally in New York banks?
Largely because OF poorer demand
for business purposes That is the an
swcr.
The subscriptions OF nearly $780,
Oot.Qo0 for New York states s51OO0.-
coo Il per cent bond Offering take on
4 new interest when viewed in this
light. do they not?
My reading OF the situation still is
that security quotations are likely to
advance--intermittently of course-but
II
age remains to be cleared away be-
fore twenty -four-cara prosperity can
be enjoyed.
Speyer 81 Company. l also learn, are
likely TO he given clean bill! for their
dealings with the St. Louis and San
Francisco system. The Interstate
Commissions report on the collapse Of
this road is ready and will disclose
unsavory facts and figures concerning
The ilm- tanning INDUCED In by the
loakum contingent There may be a
sensational sequel.
Wall street has been much exercised
over lumors that the National City
Bank, the largest in the country and
the alleged pot enemy of Secretary
McAdoo and Comptroller Williams.
would amalgamate with the Corn EN-
change Bank. the principal state bank,
whose charter is extremely broad.
Many bankers would like to see es-
tablished one huge independent bank
of character and calibrc that would
command respect and confidence in for
eign centres.
VIII Join system.
But am assured from what ought
To be official sources that the CITY Bank
plans no such institution, but will
join the Federal reserve system this
week.
do not know, however. that this
hank-as we'll as certain others-would
have preferred to know the personnel
Of the Federal Reserve Board before
throwing in their lot with tho system,
seeing that the central board has al
most unlimited powers
Fortunately, President Wilson has
sought 10 allay nervousness and to
encourage capital to go ahead along
legitimate lines. His latest message
evoked little but eulogics
But capital. let SHE confide, does not
Tor AN instant lmfTgine that nothing
but smotth waters lie ahead Beneath
The velvet glove. capital can discern
presidential iron fist BY and by
the 3ublic will also see it
Therefore, caution is still the key
note although various incidents OF an
encouraging nature have tended to
modify the pcssimism that has here
toioTc prevailed.
Much of the Improvement in sccuri-
ties has been based less upon easy
money than upon confidence that the
Interstate Commerce Commis sion will
grant the Eastern railroads q modcr-
ate Increase in freight rates-at least
haf OF the . per cent asked Were
this expectation blasted. even per
cent cal! money ana 3 per cent time
money would not prevent a serious re
lapse and wholesale liquidation OF
American securities by foreign holders
mention this to indicate that the
recovery is susceptible to reversal
should anything untoward unexpected.
ly happen
Ny own belief is, as it always has
been, that the granting Of small
Increase in railroad rates would have
an iHcalculable effect upon investments
ana upon sentiment abroad and at
nome and mat the commission would
doubtless find that the railroads need
ed succor. I do not for n moment
believe that tho application viii be
summary refused
Profits Not 80 (;rcnt
hear that Investigations ALREADY
made by The commission into the
pronts bankers have derived from rail
ROAD financing have uncovered less
THAN was popularity suspected
!. e. Morgan * Co, understand VIII
submit detailed tabuiation showing
that thc percentage OF commission paiI
them 70" New Haven hnnncinp was
nnhrlicvablY small
OF stocifs il should be said mar
the advance has already been sun
ftanilal and rapid. More ncsI,arrv
may be manifested temporarily al
though glit-edged issues ara etu,
unusually cheap ana cannot but hn
regarded rs attractive for outright
purchase.
The best grades Of bonds should
continue their upward movement under
INC stimulus OF extraordinarily chcan