Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-09-26
TALK OF EXCHANGE
OPENING STRONGEST
SINCE WAR STARTED
Conditions So Much Better
That Six Weeks Hence
May See General Resump-
ton Of Active Trading.

with the passing of another week there
has come a Frightening in the financial
skies which forecasts resumption of
normal conditions earlier than has been
generally looked for. The most i'm
portant step in this direction, and one
which has had material effect In
strengthening the situation everywhere,
was the decision of the New York Stock
Exchange Committee to permit trading
in unlisted securities at moderate con-
cessons from the closing prices as of
July 30, the last day on which the ex-
changes of the country were open.
The original restriction about not per-
mitting sales under those prices was
made so as to prevent, as far as pos
sible, the liquidation which, 1t was gem
orally believed, was to be expected be-
cause of the war situation abroad. This
rule continued in force for more than
six weeks. In the meantime. there has
come a satisfactory clearing of the
foreign debt situation and danger of
liquidation, while it is still apparent, Is
not so pronounced as 1t was when the
order to close the exchanges was given.
A wave of optimism said to be develop
ing throughout the United States gave
rise today to the impression that the
way is being cleared for the reopening
of the New York Stock Exchange, the
Consolidated Stock Exchange and also
the Cotton Exchange. 1t may be possible
to reopen them, especially the first named
institution, by November /, provided the
Federal Reserve Bank Is working by
that time.
The announcement that dealings in un-
listed stocks at moderate concessions Is
believed as the first step that ultimately
may lead to the resumption of regular
business on the exchange.
officials of the exchange are feeling out
the financial sentiment of the country.
They are also sounding the loan stua-
tion and testing the investment demand.
1t is said the financial machine Is be-
ginning to move, and that the situation
is beng developed under careful treat
ment.
RELIEF BEING GIVEN.
Bankers here today expressed the opn-
ion that the steps taken by committees
here and in New York that have been
formed to supervise the trading situa-
tion would do much to afford relief to
financial conditions generally. The fact |
that trading may now be done in stocks |
and bonds not listed on the exchange
at prices a few points below the July |
closing, when approved by the commit, |
tees, makes it possible for issues to seek |
the new level bases that must be eX- |
pected when full resumption of trading |
takes place.
No one denies the possibility of a heavy |
offering of European securities as soon |
as the necessary mediums are made avail |
able for their disposal. Each day that |
the exchanges are closed, however lessons |
the amount of foreign selling that may
take place.
The present war crisis is teaching |
Americans the advantages attached to a |
central bank in a countrys financial sys-
TEN. The efficiency and resources dis
played by the Bank of England in han
ding the situation in Great Britain, COM
mands admiration everywhere.
In lieu of such an institution we have
developed a spirit of cooperation among
the national banks which has helped |
materially in meeting the emergency. /
While the Federal Reserve system is not
yet in operation it is hoped to have it
fully working by the middle of October
The Federal Reserve Board has been
fully organized and its advice and in
tiuence have helped much in solving the
various monetary problems presented.
Under the new system we shall have |
Il banks of concentrated power. This
should permit greater unity of action
than heretofore.
RESPOND TO LOAN CALL.
The banks and trust companies of New
York city responded Loyalty to the call
for a syndicate 10 handle the new mu-
nicipal loan of S10O.O00O 600 provided to take
care of the city's maturing loans abroad
Public offering of the loan has been a de-
cded success, although the details of
ONeTSuDSCrlptlOn nave not become avail
able to outsiders. A very large subscrip-
ton response came from small investors
TO whom the per cent. interest and the /
absolute security of the loan proved at
tractive. Institutions and investors in |
the interior have taken large amounts,
and to this extent the New York banks
will be relieved of drain on their gold
reserves which 1t is desirable to build up
as fast as possible. But, at any rate,
English and other foreign holders of the
city's maturing obligations, who have not
chosen to extend their old loans into the
one, two and three-year maturities newly
provided, are sure of payment in gold.
A further guarantee of the payment
of all our debts abroad in gold is fur
nished by the banking pool which has
been organized to provide 800, 100000 in
gold in case settlement, in whole or in
part, cannot be effected in bills of ex-
change. The result of the two opera
tons is to provide a gold fund of $780,
100000 with which to settle our accumu-
lated adverse balance of trade. This
should certainly reassure foreign cred
itors and help in amelorating the for
eign position. We are already finding
some of the most conservative London
banks willing to renew American ma
turtles of banking concerns, and the
cooperative action of our financial in
sttutons in establishing the Sl5OOOO,OOO
gold credit referred to ought 10 increase
this disposition of London to make or
renew loans on this side.