The Cairo bulletin., 1914-01-26
Lower Prices for Money Always
Predicates Much Higher
Prices for Stocks.
SOME FRESH SHOCKS MIGHT
EMANATE FROM WASHINGTON
President Wilson Well Able to Curb
Radical and Disturbing Spirits
in National Congress.

New York, Jan. GA remark
able buoyancy which has come owe:
the security markets since the open,
ing OF the year Is mainly attribut-
able to two causes--a radical change
in the worlds money markets and q
more conservative attitude at Wash
ington.
Which of these two influences
have had the more weight, 1t would
be difficult to prove. The ease in
money is perhaps the most signii-
tant and far-reaching. In this mar.
ket and in London, Paris and at all
European financial ccnters time rates
have shown n sharp decline. The
Bank OF England rate was reduced
to per cent. and the proportion OF
reserve liabilities rose to 57.42 pc,
cent. the highest SINCE 1908, wheli
the percentage was 54.S7, owing to
the accumulation of funds which FOL
lowed the crisis OF 1907. 1t is OK
pected the rate will soon be reduced
to 3la per cent. The German bank
rate was reduced to 4 " per cent !;
and tas Paris banks. which har,
been carrying the brunt of the
European strain are reported in Il
much more comfortable and lmprov-
Ing condition. The New York bank
reserves were nearly $1,000, ,00u
larger last week than year ago.
The most significant result of th.s
worldwide Improvement in tne
monetary situation was the success
ful bond issue of New York State.
s5i, 100000 OF AZ per cents havinG
been placed at lO6.077 and sub
scribod for six times over. This en-
couraglng event had q marked effect
upon the entire market 1t was q
transaction that will do much to-
wards :mparting a further extension
OF confidence. 1t demonstrated tnat
capital can now be had in abundance
for suitable purposes at reasonable
rates, and. will greatly facilitate the
refinaneihg of the mass of short term
notes which mature this year.
Such sudden ease in the money
market is of course owing very
largely to tho slowing down of bus-
ness. At home the crop demands
are about over. Abroad the strain
incidental to the Balkan war has
disappeared, and business there is
also slackeaing and causing a less.
ened demand for money. Funds al.
ways accumulate following a finan-
cial crisis, or after the end of
period of abnormal industrial ac-
tivity. We may now look for con
tined ease for some time to
come, and from this condition two
results may be anticipated. First,
home securities will look cheap in
comparison with the rates for money
and advancing prices must be ex-
pected until some sort of equilibrium
is attained. Second the greater
abundance of funds, as well as tho
newly formed basis of confidence
Will lead to much new financing ana
probably large increase OF new
fiotatio1s both here and in Europe;
new issues will stimulate industrial
and commercial activity, and cause
iirmer money rates later on. Dur
ing the last three months there has
been marked falling off of new is
sues in the United States; the total
recorded being $26S,O0O, ,0OG.
againsS s505, 100000 same time a
year ago. Enterprises and improve
ments which have been deferred
will now be brought forward with
greater confidence, In Europe there
are a number of big state and mu-
nicipal loans which have also been
postponed, and these, too, are likely
to be floated We may thus antic-
pate period of renewed activity
for some time to come. In all prob
ability the United States will lead,
because economic and business CON
dltlons are sounder here than
abroad.
The next clement of Importance
has been President Wilson's note