The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-02-02
FINANCIAL REVIEW
OF The PAST WEEK
Values Respond to Proof Of Fall
ing Discounts That Money
Is Plentiful.
EUROPE BUYS OUR STOCKS
Forward Impulses Prevail Over
Cautionary Import Of Po.
litical Influences.
EUROPE BUYS OUR STOCKS

, Developments of forward bearing l.,
the field Of values have been both nu-
! merous and important In the last few
days. The Wall Street stock market
showed only u momentary slackening OF
the advancing impulse which made til,
January rise rather notable. and while tn.
rays Of political sunshine which had
warmed the share list seemed to have
lost some Of their heat II was more
clearly manifest that u real stimulus "a
recovery in securities had been provided
by the remarkably rapid turn IN money
toward extreme ease all over the world
Europe came In AS factor OF supper,
10 stocks In Wall Street by proceeding
, to replace the holdings with which it had
parted many months ago, and foreign add
Vices contained the most unqualitedly
encouraging information which America
finance had TO consider. The dum.st
budget OF news WAS much more unceptain
| In It's implications. IL suggested the pos
sibility OF some persistence OF restraint
on general business recovery. although ut
the same time there were offsetting con-
s'deratlons conducive TO more than Il
sprouting OF confidence that fine flower
of justifiable optimism.
Among other events deserving OF dis
cussion were the further descent OF EI-
ropean discount rates. with all the vSlun-
BILE corollaries OF decline the Interstate
, Commerce Commissions ruling against
the continuation of railroad allowances
on the traffic moved over industrial tap
lines. with the possible relation OF the
decision to expectations III the Eastern
rate case the country's foreign trade
statement for December. showing that =,
tremendous import movement was under
way as a sequel to tariff revision the
United states steel Corporations exhibit
OF shrinking earnings for the last quar-
ter of 1918 and the peculiar circum-
stances attending the increase OF new
business In the steel industry the some
what perturbng revelation o. the awi;-
ward posture OF the United states In
| what are called foreign affairs; the dis
concerning signs OF unchecked radcalisln
conveyed by the new legislation shaping
itself at Washington for the government
OF business and the pronounced drift ~
, money toward employment In the absorp-
tion Of high grad. securities representing
II creditors II not an owners interest
IN corporate enterprise Among all thess
there can be no mistake IN laying chief
emphasis on the situation disclosed IN
money
When the Bank OF England lowered it's
rate by | per cent. last Thursday to 3
per cent. the third reduction since the
beginning Of the year and d fall OF per
cent. during January, positive proof was
afforded that the world had passed from
state OF extreme financial strain to a
wholly opposite condition OF money market
relaxation. Not in many previous years
IN modern times has the London Ba nk rate
gone down so swiftly TO such "A low hgurc
in midwnter. The London rate is now
where II was just before it's elevation to
per cent. at the end OF August, 1872,
when European finance first became aware
thar the Balkan upheaval was then APP
preaching. The proof that the worlds
financial tension has ended was clinched
hy the reduction in the discount rate OF
the Bank of France OF y, of per cent.
20 81. per cent which promptly followed
the establishment of the 3 per cent. rate
at London. When the financial prospect
is threatening at time OF widespread
engagement Of credit for future profits
central bank rates take control OF the
money market When the situation
changes and the skies appear cloudl.ss
after Il storm OF liquidation the money
market controls the bank rates. Barring
accidents the world can now proceed 10
do business in the confident assumpt ion
that money conditions viii contribute TO
AN expansion of trade and industry and u
restoration of values and prices to profit
able levels.
To Europe the topping OF the discounts
in IN. last few weeks s n distinct AS
surnnc" that International political r.la-
tions promise the preservation nj interna-
tional peace and this ~ apparently the
one assurance which Europe has needed
10 resume it's normal WAYS OF business and
financial endeavor. The foreign iut.rpre-
'ation OF money market events IL clesrly
expressed in the huoyancy quickly i'm
parted TO the security markets and strik-
ING testimony to the vigor OF improve
ment now in progress is given by the
swift rally In British consols which last
week carried the January recovery to
NOR" than five points above the depressed
quotations OF December rh. Offering of
new securities abroad has begun RAPIDLY
70 Increase in volume and absorptive
capacity has grown so fast apacn AS to
lend satisfactory impetus to the cam
paisn or new financing which Europe has
had NO long to postpone. As an instance
or IN" change which has come over Eu-
rope note may he made of the ma nifoId
subscription which the German public ac-
corded to the $4,000 OF Prussian
Treasury warrants offered last week
Perhaps the European nnauc!al cen-
Tres VIII he oNeitLXed by the early pr.s.
sur" OF borrowing demands but foreign
financial omens are to-day prup!tlous TO,
n broadening OF economic effort which
must DO the consequence of successful
inquiries for capital, That brakes will
have to be applied TO keep tn. expan.
sion within bounds ~ inevitable. and I,
~ NOT To be supposed that money will
long remain as easy M now. For ON.
thing II IL certain that European b,nk
ing systems intend to augmen, their gold
reserves and to take advantage of th.
turn IN money AZ a season OF trade con-
traction and before business expansion
gets well under way In order to recruit,
golh supplies This Is reason why.
despite the relaxation OF the money mar
N AvaI fhat