Evening star., 1914-12-27
FIlANCIAL-LOCALA AND OTHERWISE.
BY I. A. FLEMING.

There is much encoura cement in the
fact that sterling exchange has weak
ened to a point where it is within the
possibilities that gold may be brought
from Europe in the near future, a con-
dition that few weeks ago seemed
impossible. This has been brought
about by the large exports of merchan-
disc and breadstuffs and promises to
either cause a return flow of gold or
to force England to place an embargo
on expectation of gold, as Germany has
already done.
1t is but a short time ago that the
"sold pool was formed and $780,
100000 subscribed by the banks of the
country to prevent the foreign ex-
change situation becoming strained.
But % per cent of the subscription was
called for and much of this has been
returned to the subscribers.
English investors have not been
liquidating American securities to any
extent as 1t was thought they would.
Since the reopening of the New York
Stock Exchange there have been
rumors of unloading for foreign ac-
count, and the Lusitania, on its last
voyage to New York, was said to be a
Teritable treasure ship, yet it turned
out to have but few, if any, American
securities for the market. Foreigners
appear to be holding their investments
in this country, as about the best col
lateral they have and subject to less
danger than any home rail or indus
trial.
That the trade balance has been in our
favor and the break in foreign ex-
change to the lowest point since last
April has been the natural result.
Financial men express much satisfac-
ton at this condition.
:. Lowering Rediscount Rates.
Regional banks in the federal reserve
system have lowered their rediscount
rates during the last week, and yet the
figures of total rediscounts by the
regionals show an actual reduction of
$685. 900.
Members of the reserve board are
not a unit on the question of still
lower rates, although some of the MEM
bers believe that they will have to be
made inviting to secure business. The
last two weeks have witnessed reduc-
tions in the rediscounts.
Evidence of Economies.
One of the positive evidences of the
growing habit of economy is found in
the fact that $3.50 gold pieces and
bright silver dollars were more sought
after at bank cashiers windows just
before Christmas than the usual SIS and
$40 gold pieces, which the banks
always provide for the demands of the
gift season. Heretofore their supplies
have been rapidly exhausted, but 1t
was entirely different this season.
Savings banks report increased de-
posits and look for larger savings
after the first of the year. This
economy always develops a ter the
spending season incident to the holi-
days, but is likely to be more marked
now than ever by reason of the war in
Europe.
Odd Lots on Wall Street.
The small investor is a factor of i'm
portance in the stock market, and is
encouraged by number of houses who
make a speciality of catering to the
buyer of few shares now and then.
Their purchases of stock is taken out
OF the market and frequently does not
come on again for years, sometimes
following a change in ownership or an
opportunity to make turn at a satis-
! factory price.
The record of the ACQUISITIONS of the
I'd lot buyers for 1914 is not made
lp, but the record of 1913, 24,OS39O1
'shares in the aggregate made by five
nrms. recognized as odd lot specialists
Is regarded as decidedly remarkable.
Iotai transactions for that year, all |
told, were SS,362.639 shares, SO that % |
per cent of the volume of business was
Tor the account of small investors
Bond dealers estimate that 95 per
cent of their business is strictly in
vestment buying. Three per cent of
their total sales as a minimum and 5 |
per cent as a maximum are speculative
Baby Bonds.
OF recent years the "baoy bond, busi- |
ness has become quite factor and be-
cause of this bond dealers are giving their
attention to pushing this class o. busi-
ness. In a way. it is the counterpart ef
the odd-lot trading in stocks
Baby bonds" have par value Of 800
each and many of the most attractive
railroad and corporation issues have been
arranged SO as to provide for this class
Of buying. Over the counter, from bond
houses and through banks the small buy
er obtains his bonds. He is usually :,
cumulative buyer, using the small bonds
as a medium of saving. receiy ng better
than savings bank rates on his invest
ments.
They are usually attractive. first
mortgage bonds and they bring annual
returns OF Az, to 6. and even s and
per cent to the investor based on the
market price at the time of purchase. AS
Seasonable gift, they are desirable and
were extensively advertised a year ago,
but not SO generally this year.
so far as security goes the baby bond''
StdHuS III tle same position as the 81 300
bend of the same corporation and is
generally covered in the same mortgage
and trust deed. They are secured by
railroad and Industrial property, equip
ment and other tangible assets
Railroad Earnings.
Twenty-four railroads operating in
the United States only report gross
earnings for the third week in De-
cember of s7,252,72S, as compared with
earnings for the corresponding week
last year of ss.1so.403. The net de-
crease in the comparison is ss27,675,
or 11.34 per cent.
Four roads reported increases ae.
gregating s1S4,730, while twenty re-
ported aggregate losses of $11l2,4O5
Since the fourth week in March thir-
ty railroads reporting weekly have
shown steady decreases in earnings
from LAG per cent to 1906 per cent.
with an average decrease close to 5
per cent.
Signs of Encouragement.
The Iron Trade Review finds encour-
agement in the outlook for the steel
business as a result of the advance
recently granted in freight rates to
eastern roads.
The bookings of the United States
Steel Corporation for the current