Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-11-29

| Just when all restrictions will be
taken off from operations on the New
| York Stock Exchange and free and un-
restricted trading allowed is as much
| a mystery today as it was when the eX-
| change closed July 80.
A step has been taken in opening for
restricted bond trading, but the fear
of enormous liquidation by Europe and
especially by security holders in Eng
| land, where American investments have
been decidedly popular and the hold
ings heavy. may postpone the re-
openine, free and unrestricted. until a
definite ending of the existing war has
been indicated.
4 partial reopening for stocks may
coma within a comparatively snort
period, with restriction against issues
that are very largely held abroad, ana
the exchange has sufficient data as to
these holdings to be able to act specih-
cally.
Some talk of forming gold pool TOT
the purpose of protecting the market
, has been heard, but with millions OF
dollars worth of securities held aoroau
and probably large percentage Oh
these holdings hut needing market 70
he Inundated, it is not probable that
tha fnanciers of New York city Will
permit reopening that might put IN
hazard our gold holdings ana prils
loss, perhaps ruin. to thousahos u
American investors by the eXhanstloii
of their equities. :, :
conservatives believe that it would be
hotter to keep the bars up until the need
and desire for marketing Shall DE siea,iE
reduced by possible happenings uni, .rs
situation has cleared materiaiiH' erhaps
until the railroads of the United states
have been rehablitated in their earning
capacity and the varied dependent inaus
trials shall have reaped the benent OF
the improved condition.
Bankers are generally opposed to open
ing of the exchange and, as they 1urhSh
the court of last resort, the chances are
against the action.
The hope is that, when conditions nave
improved. as they must eventualiy' tii''
there will be at the most but compare
tiyely small amount of stock thrown on
the market: that prices VIII have 1urther
recovered their strength and that re-
opening can then be accomplished Without
anything like the losses that would 1oi-
low an immediate resumption OF busl-
ness.
Moderately Steady.
Under present conditions with curb
or New street market, with no large
offerings, prices for the stocks tradeo III
hold relatively steady. But TINS market
would not maintain strength under very
heavy selling, and the traders Know IT,
save perhaps, on few stocks OF ran
roads or corporations that are especially
prosperous and certain as to dlVldehds.
There is always the possibility, too. OF
the hears taking advantage of any I'M
toward happening and selling down the
market.
An in all, it is probably the part OF
wisdom to keep the bars up.
Earning Power of Regional Banks.
Regional banks of the federal reserve
system are expected to pay member banks
6 per cent cumulative dividends on their
contributions to the capital stock of the
regional institutions.
In addition, after paving this oiVl.
dend, half OF the surplus earnings, II
any are to be paid to the United states
as /; franchise tax and half to surplus
fund, until such time as the regional
bank accumulateS a surplus OF ~ per
cent an its capital stock.
The reserve system was not lntenoed
as money-maker; its functions are
restricted; it is not a money lender to
the public, it can make no advances
or loans save to banks alone: and pos
Sibie revenue from collections are re-
Stricted by the law.
The system was created primarily to
meet emergencies-for use in times OF
stress, such to affect the financial
situation in the nation. To offer eX-
pansion and elasticity to the national
currency system not possible under the
national banking act.
Nor is it likely that these financial
disturbances of national import will be
of frequent recurrence
With the crop-moving periods OF each
year there is likely to be much money
required, as usual, and the rediscount-
ing privileges will be in demand. In
the urgent needs for ca capitalization that
will follow the settlement of the Eu
ropean war, that the United States may
reap probable opportunities. there Will
probably be good movement in re-
discounts-in times Of stress and panic
also, but in normal times it is prob
lem whether the regional banks will
be able to earn dividends.
Nothing can be judged from the
workings of the system as yet The
present rates of discount. save in GER
tain sections of the country, are against
iediscounting operations, nor was it
intended by the federal reserve board
that the regionals should at once enter
on their functions. the rates being pur
posely made high, in order that the
system might be brought to efficiency
to detail, etc. before rates were
made inviting to banks.
Commenting on this very subject,
financial authority recently had this to
say: THE federal reserve bank in New
IOrK city ana some OF tne larger clrleS
may be able to make good money rom
iudicious market operations. such as f"r-
eign exchange. etc. but it is hard to see
where the smaller central institutions
are going to make much money. The
trouble is. Congress. by encircing the
new institutions with very restrictive
regulations has made them. as it were,
government bureaus to relieve the money
market rather than self-supporting
banking institutions which it was ex-
pected they should be-
Local Exchange Opens Monday.
At 1910 tomorrow afternoon President
Walker of the local stock exchange, will
begin a call of the various bonds listed
on the local stock exchange. There will
he no restrictions to the trading and no
radical changes in prices are looked for.
Washington brokers have been doing
good bus ness in these securities for the
last month and prices are well main
tanned.
II NAV be that the forthcoming issue
of $500 600 Gas bt ndS may cause some re-
cessions in values for Gas IS. but the
chances favor large inquiry or the
new issue at better than Iar. Just what
effect they will have on quotations On
Gas IS tomorrow remains to be seen.
nrobably not much as they are held very
strongly and usually coirlnand a steady
considerable cash is seeking invest
uent n this city more atte: Dee nber
and still more when the January dis
bursements totallng over mllllon
shall have been made
Governors Of the exchange have a thor