The Bridgeport times and evening farmer., 1919-03-31
HENRY CLEWS'
 WEEKLY LETTER

bs @&u W% %s EaA 3 5 Ass
 Conditions growing out of the British governments announcement. referred to in our last issue, that artificial control of sterling will be discontinued in this market, have been the dOmi- nant factor on the exchanges for the past week This fundamental an- nOuncement was promptly followed by a statement from the Federal Re serve Board that the control of lira exchange, which had been exertefl by the board, acting jointly with the Italian Institute of Foreign Exchange, had been relaxed. There has been q notable sIaclIening in the severity of our embargo on gold and silver for some time past, while a strong ten dency toward the slackening of finan- ciol censorship both here and abroad has been observabIe---aided as it has been by the pressure of financiers and merchants who desire to see a, return to normal conditions.
 This change of policy represents, as
 was indicated in the announcement l concerning sterling, a definite step to- ward the restoration of peace time ! methods of trading. Taken in con- i junction with the necessary conse- qIences and implications of the step, 1 1t is perhaps the most important measure looking to international free ! dom of dealing in securities that has i yet been ordered since the opening of the war. Precet3ad as it was by the cessation of control of the issue of securities by the so-caIIed Capital IS- iS5ieSs Committees of the United States and Great Britain, it goes far toward ipuucing the world back upon a basis ! of free international competition for capital. It is already seen that there must be iTnm ediate and effective ac- ton looking to local financing through private channels of our great export balance. This balance still continues heavily in favor of the United States and must in some way be settled. {, Foreign countries cannot afford to allow their exchanges to go to an E11nduly low quotation, and sterling has already been quoted for checks as low as sf.5S. while francs have de !chned to 6.0O francs to the dollar, and lire, according to some quotations, to 500 lire to the dollar. This inevitably means the opening of large foreign credits in the United States and the offering of securities in this country. It toreshadows a very strong demand for American capital, and points in
 
 ity in the stock market. That the iCNew York market must, for a. time at least, occupy the position of world financier and world creditor is still the opinion of some of the a-blest ] financial minds. Temporary disturb i ances of security values the fuctua- tions in the value of foreign issued 1 bonds and stocks where no provision ! is made for the payment of a, stable | interest return in dollars and other shifts and changes in the local selling ! process of such foreign securities may l be expected, and will continue until some stable and semi-permanent ba-
 sis of exchange is arrived at through aETa ngenents for regular and ade- qlHate financing such as has alrealiH been described. The War Finance : ECorDOTation has already made pre- ! liminary arrangements for the appli-
 cation of the bfdion-doIIar credit aI- | lotted to 1t by Congress for the sup port of our export trade and may prove to be a powerful factor in bringing about more stable situa- ton.
 DOmesticaHy the most promising 1 financial event of the week has been the definite establishment of arrange
 ments with the Finance Corporation and incidentally with the banks, for 1 the financing of the needs of the rail i roads. Congress may lbe expected to meet early in May. and this leaves
 probably not more than six weeks to i be bridged over by the temporary plans now projected. This should not aoe difficult, and success signifies that there will be no serious interruption
 to purchases of supplies and equip
 nent. The outlook has had its due ! aff 4o1 of
 road shares and of equipment stocks
 as well. In reaching 3. basis of agree
 u1ent for temporary stable prices on
 the chief steel products the steel
 manufacturers have taken at least a i tentative step toward facilitating the resumption of business on a normal basis. There are predictions that these prices may not prove to be great stimulatorS of trGde, owing to
 the fact that large portions of the
 community believe further reductions
 must be had before a profitable foot ing for operations can be arrived at. This remains to be seen. If the gov
 ernment will, as 1t evidently intends
 to do, begin purchasing on behalf of the roadS, the navy and the army,
 and the public service generally, upon the new price schedule, it will itself set a. powerful example which should
 have an important effect in maintain ing the quotation, not only of rail-
 road shares but also of metal stocks and. through indirect influence, of
 many other Issues as we'll. The not
 able strength of United States Steel
 and other shares during the past lweelc has shown how the market 1 views the prospect
 I Politically the outlook for the next flew weeks is decid ded1y uncertain. I;Hoperul ra.ctorz are nound in the | strong intirnatfons from Paris that a