The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-12-22
CONFIDENCE Is IMPROVING.

CClAOuI 6I0Ie III 1A6 uI16l ISOPO01AA8s
writes Henry Clews, the New York
banker. in his current weekly review
of the conditions that prevail in the
world of trade and finance. and he
continues, 1.-The financial district. 1t
should be remembered, has been pass
ing through period of unparalleled
depression resulting from the war.
That depression was not allowed to
express itself in values owing to the
shutdown Of our exchanges and the
establishment Of minimum prices. For
the same reason prices did not have
full opportunity to reflect the re-
markabl recovery in confidence which
has taken place during the last two
months. A considerable rise oc-
CURED during the first few days of
the week, but this was quickly
checked by profit-taking and evidences
of skillful foreign liquidation. There
was, however, no rush of foreign sell
ing, such as had been feared. and it
does not appear likely that there will
be. unless some untoward events of
special Importance precipitate such a
movement.
THE Interstate Commerce commits
sion decision granting the 5 per cent
increase in rates on eastern roads.
with the exceptions specified, will have
a far-reaching moral effect. The ex-
ceptions include rail-lake-and-rail and
rail-and-lake rates; also the rates on
bituminous coal and coke. Anthra-
cite coal and iron ore and rates held
by unexpired orders of the commits
sino are likewise excepted. Confidence
will receive a new and effective stim-
illus. 1t marks a change of attitude
OF the commission toward the rail-
roads that cannot but be beneficial.
Railroad credit will be strengthened.
and the roads will be able to make
more definite plans for their future.
It is said the earnings of the roads
will be increased about 40 to SO mill
lions. This Is not a large sum, rela-
lively considered; but the action. of
the commission is quite sufficient to
check distrust and inspire confidence
One effect Of the decision will be to
create a more hopeful feeling in the
steel industry, of which the railroads
are the best customers; and it may be
hoped that their action will avert the
proposed reduction of wages in that
industry. The effect upon the stock
market was naturally encouraging, al
though some caution was observed I'M
til the results could be more definitely
measured. The decision will also
have a stimulating effect upon busi-
ness in general, and will aid to coun-
teract the depressing influences Of the
war.
Beyond question the war is still
the dominating influence in this mar
ket. An early end Of that colossal
struggle would cause a sharp rise in
security values; and conversely pro-
longatiOn Of the war beyond what is
anticipated will be depressing. But,
since the worst has been largely dis
counted, the effect Of disaster upon
values would not be so pronounced
as the approach Of peace, which some
think is nearer than generally sup
posed. The possibilities Of foreign
liquidation must however be kept in
serious consideration. London as we'll
as Berlin Is quite sure to send Ameri-
can stock back to us il prices on this
exchange are rushed upward too
rapidly. as was the experience during
the early half of the week. There are
many needy sellers in both Of those
markets. The London exchange has
not yet opened and will not until the
new year, so that this market still
offers the only refuge for those in dis
tress.
1.-The present war is causing a fear
full waste of capital. and the enormous
new borrowings for financing the war
will inevitably. exert heavy pressure
upon the worlds security markets.
The worlds savings will doubtless be
materially curtailed. and the urgency
of war loans will make it difficult to
secure capital for new industrial or
business enterprises. This means that
capital, or savings. for some time to
come will command high rates. On
the other hand, we have an important
counteractant in the form Of cheap
money. Funds are accommodating at
home and abroad, very largely as a
result of the diminished volume of
business. In consequence. short term
money can be more freely obtained
This will facilitate the. carrying of
good stocks which are already selling
at low prices and yielding much more
profitable rates than short term obli-
cations. Our own bank reserves have
been greatly strengthened by the
operation OF the new banking system,
not to speak of the return of funds
from the interior and the lessened de-
mands for commercial purposes.
Funds ore also comparatively album
dant in London; and there is no longer
any talk OF gold exports from here.
especially as the balance of trade is
w1~:~
gold imports are more probable than
exports.
Much announcement can be + und