The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-02-16
FINANCIAL nfPRovEs1ENr.

r IN kASO4kA ~ EA2AA1 IXv -
mo better evidence of financial Inn
provement could be recorded than
the increased activity of new finan-
cling" writes Henry Clews. the New
York banker, in his current weekly
financial review. Immediately fol-
lowing upon the opening Of the war
there was a sharp contraction in new
capital applications. the total of
which recorded for the last seven
months reached about $480,000.00O.
or $1s6,00O,00O less than the same time
last year. The lowest month was
September. when applications fell be-
low $28.O0O.0OO. Recovery has been
gradual. and in January the total rose
to $127.0o0.0O0. or only 100000 be-
low the same month in 1914; while
the total announcements thus far In
February already exceed $16O.O00.000
bonds. including $100.000.000 New
York Central. $27.OOO.0OO New York
state. and $15.OOO,OOO Canadian Pa
cific. besides a number of other i'm
portant issues. The January total was
Of course swelled by the Pennsylvania
issues of $49,0OO,0O0. Total issues in
February last year were $176,OO0,OO0.
A considerable portion of current new
issues is for the purpose of adjusting
maturing obligations; but the signifi-
cant feature is that these operations
could not have been successfully car
ried through a few weeks ago; while
now it looks as if other important
flotations will follow, so that this Feb
ruary will considerably exceed the
same month year ago. While we
are facing beyond doubt an urgent
demand for capital, it is not likely
under existing business depression
that there will be any great demand
from really new enterprises. This
year an extraordinary volume of short
term notes and other obligations ma
ture, which will have to be extended
or turned into fixed forms, the latter
method being the most probable.
There is also another and very
significant trend in the new demands
for capital. which is that nearly every
important nation in the world except
Great Britain is either borrowing in
the United States or wishing to borrow.
This is due to the war. London has
practically retired as the worlds
banker for the purpose Of devoting
its whole financial resources to con-
duct of the war. OF course, this with
drawal is temporary. yet it offers an
unusual opportunity to the United
States, because New York is now the
only free capital market in the world.
and hither will come a large portion
Of the new capital applications. At
present the war is being carried on by
all belligerents largely by means of
short term obligations, although Great
Britain Is aiming to pay a consider
able share as current expenses. Later
on these war debts will Returned into
more permanent forms of investment.
All OF the belligerents have establish
ed extensive credits in this market.
for the purpose Of purchasing war
materials. immense quantities Of which
are being steadily shipped to Europe.
This movement will continue as long
| as the war lasts, and is proving q
very vital factor in swelling our ex-
ports. large quantities Of ammunition.
automobiles. clothing. ETC.. leaving
American ports every week.
Our exports are being further ex-
banded by heavy, shipments Of wheat
| and cotton. Meanwhile our importa-
tions are running very light, owing
to the interruption of supplies by the
war; and in the week ending Febru-
airy s. the excess of exports over i'm
ports was estimated at $37,O0o.00O AS
result of these international opera
tions. foreign exchange has again de-
cline. to the lowest point since 1907.
Gold imports from China and Canada
are coming at q moderate scale, and
larger amounts would follow were it
not for the establishing Of the foreign
credits referred to above. 1t is esti-
mated that the present inward move
ment may run as high as $1O,00O,OOO
but we do not need gold while Europe
does. and under existing conditions il
is more advantageous to Europe and
to the United States to allow these
credits to stand. We have thus be.
come. a creditor instead of a debtor
nation.
1.-THE most important local factor
in the financial situation is the abun
Ice of loanable funds at reasonable
rates. This is due partly to the dull
ness in trade and partly to the salts
factory workings OF the federal re
serve banking system. There ha
been a steady expansion in loan
which now stand at $2,221, O0O, 0O'
against s2,1S0,00O,0OO at the opening
OF the year. Bank reserves have de
clined somewhat in consequence, blu
the surplus last week was still abov
$14O,O00,OOO. Investment condition
have improved as shown by the read
absorption of really high-grade bond
and stocks. Some of the latter ar
selling at very low prices, compare
), with current rates for interest Stoc
= exchange values have been subjecte
to sharp fluctuations. The passing @