The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-08-30
FINANCIALNEWS
AND COMMENT
Millions for Investment, but
Nothing for Excessive Spec
ulation, Is Wall Street Tip.
CHECK ON MONEY LENDING
Liberty Loan Money Pool Com
mittee Sounds Warning to
Prospective Borrowers.

MllilOnS IOr investment Out nOt oHe
cent for excessive speculation could have
been the title Of a statement issued yes
terday by Gates w. McGarrah. chairman
OF the Liberty Loan Money Pool Com
mittee and president Of the Mechanics
and Metals National Bank. which caused
a halt in the advancing movement. but
resulted in no serious decline in market
values. 1t aroused selling on the part
OF holders who could take profits and
who felt that a further rise in prices
could not be accomplished without an
expansion in speculative transactions.
They forget that this market Is and has
been for several weeks an investment
affair and that the term victory can be
applied to recent stock movements. 1t
was natural that such a statement, while
undigested and unanalyzed. should cause
temporary unsettlement, but 1t did not
increase the volume of business. which
was slightly below Wednesdays total,
and 1t did not halt the investment buy
ing which has been going on for some
time.
While the statement was timely, II
should have been made before the sue
cesses of the Allies began to assume such
large proportions. 1t was the first con-
crete statement issued by the money
committee since its inception. although
It has been shown here repeatedly that
a tight rein on speculation was being
maintained. Mr.. McGarrah's statement
confirms the assertions here that specu-
lntion would be kept at a minimum, but
adds the admonition that the money
committee will permit the call money
market to, care for itself, with prohibi-
tive rise in rates provided excessive spec
ulation is inaugurated. 1t is idle to at
tempt forecast of how high rates in
free call loan market would go. but that
they would reach a point where specula-
ton would be prohibited Is unquestioned.
So long as the volume of transactions
keeps within the 100000 share mark
the money committee will probably con-
tinue its present task of finding money
for loans on mixed collateral at per
cent and on all industrial at 6la per
cent, and alt legitimate investment bust
ness will be cared for. No well informed
banker. however. is inclined to predict
any lowering in rates for a long time to
come.
The lowest prices for the day were
reached shortly after the publication Of
the money committees statement. but
the market soon reused itself from the
temporary unsettlement. became orderly
and closed with net losses in the active
list ranging from fraction to "a points
and with fractional net gains by few
rail issues General Motors, which is in
a class by itself sold as low as 1872. a
decline of % points from Tuesdays
high, and at the closing showed a net
loss for the day of IA points. United
States Steel common, which becomes
ex dividend $4.25 a share to-day. after
selling at 116A declined to 114A, but
ended the day at HAY for a net loss
Of IN. 1t represented one-third OF yes
terdays entire business in stocks. The
next most active stock. New Haven,
gained Y, and the next, Anaconda, after
gaining y. had net loss of only u for
the day. Marine preferred sold as low
as 101A, for a net loss of "a. Pierce
Oil. traded in for the first time yester-
day, rose a point from 1871 the open
ing quotation. No other stock enjoyed
transactions OF 10000 shares or more.
There was no new time money and the
money pool had to make heavy loans on
account of the days big Withdrawals Of
United States deposits, which aggre-
gated nearly $500, 1000 900 for the week.
To show the desire of the larger banks
to foster investment business 1t can be
stated that one important institution
has not called a single call loan since
July 10, but to avoid calling such loans
1t has had TO borrow heavily from the
Federal Reserve Bank at times. Liberty
bonds were steady and foreign govern
ments strong. Foreign exchange con-
tinued to move in favor of France and
franc cables enjoyed the largest bust
ness in many months, proba bly, in con-
nection with payments to the expedi-
tlonary forces. The feature Of the Bank
of England statement was an increase Of
SIS, 100000 in gold holdings as COM
pared with last year. There was a slight
reduction to 1916 per cent in the pro-
portion OF reserve to liabilities.