The Bridgeport evening farmer., 1916-09-19
World of. Finance
(Clews' Weekly Letter.)

7t- (Clews' Weekly Letter.)
 The flnancial,markets have present. , ed sunmistakable signs of increased pqfiic interest and participation this we{k both in the direction of invest /meht and speculative operations. For sev6ral weeks there has been evidence of k broadening tendency. Since the wa& began there have been phenome- nA4ilncreases in our export trade not | alu13e in the form of munitions, but als8 of peace exports to neutral coun- tritB that formerly were served by onG or smores of the prebent belliger- ken{A All will concede that when pe4ke is,restored there is to be intense ! lac1Rity displayed by foreign manu- tfxdurers in the direction of re-estab- usiang themselves in former markets. lndustria1 securities have been sus- taftpd by evidence of a growing be- NeEl that recent interpretations that ! thdfwar will end in the near future hAR been to some. extent modified. i iPubHU 0fficialss in the Entente coun- 1 trieEzare to some extent responsible fer this change since they have been adv1M1fy against over-confidence as a prdhable forerunner of disappoint- uehl If it unfortunately should urdeVk the fact that war still is to c1a8 hundreds of thousands of addi- tio&A victims it will mean that SUD- pli}3 of munitions must continue to i lesN our ports to such of the belliger-, entk as can arrange for transporta- ftict1 In this way there is not likely Y to t9 s1dden termination of the for sAkk F orders for American made sup pli&d such as has been so greatly fear ! ed Ind to some extent discounted in Stokk Exchange circles.
 mat 10 far as direct sales. are con- csriaed, the foreixn. liquidation of I AmAfican securities resulting from the wsr has In a broad sense been vir- Etunlly completedl Floating supplies a1poad of stocks were freely disposed |. q during the Balkan wars. w WAatever ltrertainsd of them came back quite Ffree1y when, the larger war. which has Been 50 appropriately styled the War l64 Europe, began After. the floating 1uNplies had been sold. investment hoa6ings IF Great Britain, which was 1 tts largeSt iforeign holder of our se- curi4ies, were first forced out, by ih-. 1 yftxtlons to deposit them with fhe l 16vsrnment Con attractive terms) and And11y by imposing an arbitrary and ! haGry tax on the incomes derived by l hO1ders from such securities as the I ixovernment desired should be depos- 1 ited Hence it seems reasonable to l believe that private holdings abroad l have in a large sense either been sold ] outright or deposited with the British and French governments. for the French Treasury made similar de- t5ssards upcn its nationals There 'un- iAoubted1y fS a larger volume @ of American securities stin in the cus- I tody of the British Treasury. These. l howsver. are not likely to be sold, ! since they have a < greater value if l Ased as collateral for American loans I The recent s250.0o0.oo0 British loan
 1s an example in this respect. In that
 1ransActfon collateral having in this jrespec&. In that transaction collateral 1 having market value of $500, 100000 fmaS deposited to secure the $250,- 4 eee. poo idBue. thus providing mar f91nfof 20 per cent Of the collateral {one-th1rd or $1oo.ooo.ooo. consisted of. ] jAnase1oan investment securities which It Sonce removed that important II amount from the probability of sale I within the two-year period covered
 lty the loan. Meanwhile it is Ander-
 stoeA that the loan transaction in question was merely the first of segles of similar ones. The British
 IChaAce1lor has extended the original
 kHn0bfltzat1on scheme by, applying it to bonds of neutral European and South lAmsrfcan countries that are in the \ possession of British investors. The
 lteta1 value of English holdings of the tApecldc securities whose deposit thus
 fhasy been invited is understood to be lAbOskt s3.ooo. 100000. Manifestly such
 IA huge volume of securities which
 Iare 1e be borrowed from their hold
 |afS by the British Treasury, not pur-l fchassd outright7is to be used as col
 tlaksra1 fer loans.S our, own centre is
 lths most natural one to which the
 |Bs4t3sh TFeas4Fy&would turn. f Hence,
 to be successful these isaues must be
 |RAAs attractive to American invest
 NrA If the collateral be entirely com
 lDassd of foreign securities, the results
 tHaav hardly, be expected te be as fla
 e~o1a77le as if. as ip the ease with the
 (fecsnt loan. good sprinkling of high
 grade American investments be in-
 IL
 pose, therefore. that the British off, leaals will be disposed to continue to lheId large supply of our securities
 lfor use in the preparation of this
 iclass of mixed collateral. It was on,
 this basis that the probabilities do not
 isesm to favor further inpoftant sales
 Eby foreign holders of American securi-
 tfias, ls &s
 Gold from the British Treasury is
 flowing into New York so actively,
 iciSss te $30e,00o,0 ,000 having arrived
 since the beginning of May, that it is
 idifleult to realize the object unless
 ljt, be matter of prudence to have it
 lhefe as safeguard against the acci-
 ldents of war. Or it may be sent here
 for it's effect upon the domestic money
 isituafion as we'll as upon the stAbili-
 lgation of the sterling exchanges. Gold
 Is in such active supply that it is not needed on any basis of nearly normal
 Idsaaands. The $250,00e, ,000, repre- Eeented by the proceeds of the latest
 British loan, have become available
 land are, so far as their buying power
 }s concerned the equivalent of gold.