The Bridgeport evening farmer. [volume] (Bridgeport, Conn.) 1866-1917, 1916-12-11
HENRY CLEWS
weekly letter

Weekly lEIIEk
(Clews' Weekly letter.
For some weeks past this market
has been ruled by monetary cond1-
lions Owing to the tremendous
drain upon our banking resources the
supply of loanable funds had been
materially curtailed. Since Jan.
foreign loans have been issued in the
United States to the extent or nearly
$1,4O0, 100000 while the new capital
applications reported by domestic
railroad and industrial corporations
aggregated $2,070,o00,000 total OF
$3.50. 600 900, or about $85O,O00,OOO
more than in the first IL months OF
1918. These figures cover only the
principal states, and do not include
the loans put out by municipalities or
states, nor the innumerable issues by
smaller concerns, of which it is i'm
possible to keep close track. nor the
millions OF repurchased foreign hold
ings of' Americans In addition to
these demands upon. our supply OF
capital, there has been the enormous
drain upon banking resources arising
from the extraordinary activity OF
trade and the high prices Of commod-
tiles. The consequence of these de-
4n1ands is, now being felt in dimin-
isaaed supply OF loanable funds and
the resultant possibility Of too large
an expansion OF credit. 1t was these
conditions that doubtle induced the
Federal Reserve Board to issue a no.
ttce OF caution against a too free alb
sorption by banks of foreign loans
and notes; and the situation was
further aggravated by the low ,condi-
ton OF bank reserves at New York,
the total surplus reserve Of the New
York Clearing House banks week
ago being only $41,O00,000, or $685.
900 900 less than a year ago. This
decline was partly due to the absorp-
lion az gold by Tia Federal Reserve
banks in various parts Of the country.
these institutions holding $5s8.o00,-
900 Of the precious metal Dec. /, an
increase in IL months Of over $780,
600, 900. The Clearing House banks
held 1896 900 An specie, an in =
crease Of $4,000, 900 compared with
81 year ago; while loans stood at
So, 37O, 900, 900, or $3.50, 900 900 more
than last year at the same date. The
wisdom or preventing q too rapid
absorption OF foreign obligations is
not therefore questioned; although,
onssthe other hand, there was NO in
dication Of excess in this direction as
yet, especially as the security was
prime and the placing Of British
Treasury notes would have proved a
protection Of our own gould supply in
event Of smaller exports and larger
imports making 1t possible for El-
rope Ito recall our gold later on. If
caution were needed anywhere, it
was in the fiotation OF a number of
tndustrials Of a quest enable charac-
ter especially those based upon pres
emit abnormal profits which cannot
be permanently sustained. Eventu-
ally losses from such ventures will
far, exceed those upon best govern
ment Issues: some Of which win later
on provide good profits at present
prices. Another complication in the
monetary situation was the necessity
of the British government maintain
ing sterling exchange. Great Britain
is particularly interested in prevent
ing dear money at New York, and to
aid in this direction another consider
able amount Of gold has been en-
gagged for this market, Of which over
s35, 900, 900 has already arrived from
Canada. During the latter portion
of the week the money market show
ed an easier tendency owing to gold
imports and partial return Of funds.
frpnl the interior.
congress opened on Monday and
the Presidents message proved de-
cided1y res ssuring. His appeal, for
justice to the railroads will receive
the approval Of all fair minded peo-
pie. His recommendation Of an en-
largement of the Interstate Com
inerce Commission was wise and.
necessary. The compulsory investi-
cation Of railway labor strikes. which
has worked, well in Canada. is also
"a stepi in the right direction. $50. too,
was his support OF the Webb bill.
designed to facilitate American ex-
ports. Happily the President avoid
ed any recommendation regarding
the high cost Of living, which is
iproblem Congress intends to invest
gate, although legislation can do little
toward solving what isireally a world
wide economic problem. Dear food,
aclothtng and shelter are almost en-
tirey due to the war. Supplies have
decreased; waste has increased. There
is no cure for such conditions except
Increased production and economy,
which results will naturally follow
high prices quicker than any artificial
regulation or legislation. Specula-
4 On may in some instances have ag-
gravated the situation, but in other.
cases 1t affords relief by carrying
over the surplus OF one period to
meet the famine OF another. Extremes
Of speculation or hoadup Of supplies
fheuld be restrained, but an actual
Impression OF speculation, whether
fer the rise or the fall, would result
IN more harm than good. There is
40 more efficient stabilizer of values
shan reasonable and intelligent spec
hlation
The increased cost Of living is al
ready becoming a subject Of serious
agitation, and public Investigations
are to be anticipated. The great dan
ger is that Congress may be stam-
peded into some sort Of rash legisla,-
tion All sorts of nostrums will be
proposed and pushed hard. The
present drift is toward more and
more government interference, thus
such dangers. Wage add
.vanees are numerous, and will do
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