The Washington herald., 1918-12-25
Financial Nel1J--Stock Market Prices
STOCK TRADERS
PREFER LONDON
Holland Reports New York
Brokers Incline to Brit
ish Methods.

A few years before the death OF
James r Keene some of those who
carefully scrutinize market trans
actions were unable to detect any
which could be attributed to the
operations carried on by Mr.. keene.
One of his friends spoke to him
OF this and Mr.. Keene said in re-
ply Il have transferred almost all
my transactions to London There
the rules are so reasonable that II
is possible for anyone who finds it
to his advantage to conduct op-
erations with perfect secrecy to do
that. Here this cannot be done.
They have gone too far in pryinS
into the affairs of operators so
that every day these are reported
as though they were in an open
book"
Mr.. Keene professed to be salts
ned with the change in the base
OF his operations from New York
to London
Since the United States became
one OF the belligerents, several men
who foTmely operated upon the
fiOor of the New York Stock EX-
change retired temporarily from
active business life. With the ad-
vent of peace and the certainty that
peace will be permanent. at least
for many years, some of these men
now contemplate a speedy return
TO earlier activities
One man, who formerly carried on
very large transactions in the securi-
ties market, but who withdrew from
active life there soon after the war
began, decided that an excellent op-
portunity for active business life in
hRnln
s1on as peace came. He. therefore
went about among his friends in the
financial district and made injuries.
He did this day or two ago. When
he received all the information he
needed he determined that he would
conduct his operations through the
London market rather than in New
York. He found that many are per-
suaded that 1t is from many points
Of view advantageous for an operator
on a large scale at least to conduct
his operations through London rather
than through New York. He dis
covered that some impatience or irri-
tation is felt by operators because OF
some OF the regulations and restrlc-
tions which have been adopted in the
securities market and by the banks.
None of these exist in London. He
was also informed that when peace
is confirmed by treaty. normal condi-
tons will prevail in London so that
operations can be conveniently car
ried on there. Information comes
from London that pI Iesumably peace
will be confirmed early in the spring.
He has, therefore. decided that when
renewing business life he will take
advantage Of the London methods and
will turn his back on those in New
York.
Restricting Credit.
Presumably when the bankers
money committee adopted the re-
strictive measures which largely in
crease the amount OF margin neces-
rary to secure a bank loan on col
ateral. the committee was of the
opinion that the effect of this move
ment would be almost exclusively felt
In New York City. II that were the
opinion of the members of the bank
ers' money committee they appear to
have been mistaken because from all
parts of the country have come evil
dences that these restrictive meas
ures have been felt and the COM
plants occasioned are thereby, rela-
lively speaking, greater than is the
case in New York City.
No one questions the motives which
led the bankers money committee to
insist upon these restrictive measures.
And yet many are OF the opinion that
in London nothing OF the kind could
have been adopted, even though there
was the same occasion to conserve
credit to the benefit OF the govern
ment as is claimed to be the case in
the United States. One of the effects
OF this restrictive policy Is disclosed
in the market quotation for liberty
bonds And it is the opinion Of men
whose financial judgment is worth
needing that the prevailing low quo
tations for liberty bonds reflect the
emergencies to which many of those
who have entered the security mar
ket and have placed orders to buy or
to sell securities have been put. They
have found It impossible to meet the
demand OF a broker who tells them
that the margin must be lacked up to
90 per cent from 10 per cent or Is per
cent to meet the restrictive order.
Therefore they have turned to such
securities as they possess for the pur-
pose of selling them in order to be
saved from loss Many of these Sc
curities are liberty loan bonds, and as
the demand for them is at this time
less than the supply these bonds COM
mand in the open market a price
which, upon the surface, will appear
to affect the credit of the govern
ment
The Effect Upon Business.
So also these restrictive measures
are producing an effect upon business
which is now recognized. 1t is serv-
ing considerably to influence mer-
chants to fix the limit Of their pur-
Chases of commodities at the mini
mum 1t was said this morning that
1t might be a good thing for some
American bankers to sojourn a few
weeks in London in order that they
might learn some Of the methods.
highly successful, which characterize
banking policies in that metropolis
II restriction and very stringent rules
continue, the United States, and its
great securities market which is the
New York Stock Exchange. are sure
10 lose business, in the aggregate the
large amount Of which, were there
no repressive or restrictive policies in
operation. the United States would be
assured.