Daily capital journal. (Salem, Oregon) 1903-1919, 1914-11-19
HENRY CLEWS WEEKLY
FINANCIAL LETTER

lhese are retlecteu chleilY IN easier
money, a break in sterling exchange
and improvement in the credit outlook.
BY far the most important current
event is the opening os the Federal re.
serve banks on Monday next. OF
course, these institutions will not be in
full operation probably for several
weeks to come and some temporary in
eonveniences may be caused by the
transition from one banking system to
another. These however will be trifling
in comparison with the advantages of
the new system 1t is estimated that,
as result of lowering reserve require.
ments from 25 per cent to IS per cent.
including State banks and trust com.
panies, the increase in the amount Of
loanable funds of the New York clear.
ing house banks will be about $l60,000,-
900; and possibly S300,0OO,00O in the
entire United States, In all prob
ability there will be a further retire
ment Of clearing house certificates and
emergency currency after the new sys.
TEN becomes effective, so that the net
increase in funds will not reach the
figures Just mentioned. Nevertheless,
the increase will be large enough to in.
sure period of easy money for some
time to come; because the requirements
of legitimate business are very small
owing to the continued contraction of
trade and industry. Clearing house re.
/ turns continue about 25 per cent last
year. The requirements for financing
the crops have about reached their
maximum, and henceforth the demands
from these sources viii diminish, especi.
ally as our exports of food products and
cotton are very liberal. Another proof
/ of reviving confidence is the eancella.
/ tion by the savings banks of the agree.
ment to insist upon the sixty days
| clause in regard to savings, which is
now left to the judgment of individual
banks in this district. Still another i'm.
portant development was the with.
drawal of restrictions on trading in un.
listed securities. The New York Stock
Exchange is now earnestly at work en-
deavoring to effect an early reopening
with encouraging prospects of success,
Some fear Of foreign liquidation still
remains, The selling pressure however
has considerably diminished during the
last few weeks, and would, if the Ex.
change opened, probably be confined TO
those in positive need, On the other
hand the disposition Of the buying
power has sensibly expanded. The
partial restoration Of confidence has
brought in sight many possible buyers
VINO would eagerly take our securities
at bargain prices As to how much
foreign selling would really occur in
this market, it is impossible to de.
termine, 1t would Of course be con.
fined to comparatively few interna.
tonal stocks. The holdings of Ameri.
cans abroad, It is well understood, have
largely diminished. At the same time
there are large amounts Of securities
owned abroad but held upon this side
which might come out under forced sale
The important fact remains however
that during the last month there has
! been less disposition to sell and great
.er inclination to buy, which has no,
been able to make itself felt beeausC
of the closing, of the Exchange. During
the latter period there have been nc
: important new issues Of securities. Ii
, spite of dull business, savings hav,
been accumulated; and in all probabiit,
5 there is an unusual amount Of money
, awaiting investment. and depending en-
tirely upon a sufficient return of con
fidence. One more favorable develop
ments is the carly opening Of the New
York Cotton Exchange. and the adop
tion Of satisfactory scheme for financ
? ing the new crop. The expiration o.
( tho British moratorium almost withou
notice was also a significant event.
: The local money market is easier ow
, ing to conditions already referred to
and there has been further improvement
in foreign exchange which touched tn,
lowest rates quoted since the war be
gan.
OF late there has been a much bette
, Investment demand for short tern
notes, municipal bonds aud highgrad
securities. The absorption of these il
the aggregate has been very consider
u able during the past two or three weeks
and would suggest correspondent i'm
provement in securities Of the mex
grades, With adjustment to war con
ditions nearly complete with con
fidence steadily reviving, with eas,
money in prospect, there Is good reaso
o to anticipate n progressive revival i
Q business and further recovery i
9 security values
q Great Britain's moratorium expire
G on the 18th inst, aud without producin
G any commoton in financial circlei
which now iustifies the belief tina
there Is no longer any cause for apprC
& hensiOn regarding the financial stuG
:. ton In London or In this country. bor
Il don is the world 3 monetary contel
- hence favorable conditions there ar
Il naturally reflected in New York, III
y financial center Of the United State
}. Call money In London is now ~ pc
q cent and the discount rate in the ope
, market per cont The amount Of gol
n held by the Bank Of England now
!, S3i5,000,000, being the largest sum eve
~ held by that Institution. This shown
/ by the Bank Of England, together wit
. the money rate in the open markC
w while the nation is engaged in gcncrI
i European war (involving II is claime'
" n daily expenditure Of from Sl0,000,00
y to $50,00O,000 by the various nations
should relieve us of any further NJ
y easiness In connection with the financii
y situation, " London Is no complacet
y under the circumstances, why should N,
y business here 80 ON smoothly and wit
v increased confidence from one end ,
x the land to the other, especially as "
70 are provided by our crops with q
x abundance Of all kinds Of food supple
for home use and for export, and "
- "a A q. ". a..