The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1919-06-27
New York, June FL, 1919.

New York, June Il, 1919.
The kew to the speculative markets
,.;-eiv in the control of the
Is en-, market and at present the
money market is taking its cue from
monEEs sderal Aeserve Bank authorities:
the sek the clearing house banks OF
Lasa YORK Citv found themselves,
New oh combination OF circum-
throu es facing a deficit in legal re-
sIa anss for the first time since the re-
SEW svstem came into real opera
selse The deficit was small one and
uon' nj due to any lack of rediscount-
wa wa naner. but the policy OF the ke~
aolu . Hoard in relation to speculative
sei s. has become so firmly I'M
expan nd mon the financial district
pre pre- he banks are becoming increass-
! !het unwilling to permit their FUNDS
insls snpioyed to too large an extent
y: 70 .he channels of speculation.
III o..s;de of the security markets the
Ou.'t hove had some heavy burdens
to carry along since the iirst o. I inst
The income tax payments1, s S ,,r@e
saturday and Monday, called ror iaI Sc
use of banking funds NOT only 49,; me
financial centes, but at inferior poin.s
as well, resulting in heavy cu1,in y
down Of out-of flown balances. y Is
helieved here, in fact that the siiow
Of money from the country 10 .ne re-
serve centers, which has peen IN coli OF,
Siderable proportion since the can can
market has been going ABOVE = pei
cent. has come to an eng 10! lhis SO
con Ordinarily the interior pahks
would not begin to draw down tnsI d
balances for another montn anu
would much prefer keeping the money ai
husv in the stock market tnan 10 1ak-
mo it back home at this time. me
eroo moving demand does not start
until the latter part OF july or tne
early part of August and until tneh
The western banks usually limo their
supply of funds considerably IN ex-
cess of their local demand.
Hence they accumulate balances az
New York and other reserve cities on
which they receive a nominal rate OF
interest when it is on deposit ana
GOOD rate Of interest if the stock mar
fet is active and they are able to nave
their money put ont on call at attrac-
tive figures. This year, with, the tax
date coming in the middle OF une ana
doubtless with many local clients de-
handing accommodation tor the tax
period they have been Inclined to cut
down balances in New York Inc
Federal Reserve Boards warning
against oversoeculation and the threat
of an investigation OF the money
market activities Of member banks
have made for caution and INTERIOR
hanks which were discounting heavily
at the reserve banks against paper
secured by government Obligations
and lending the proceeds on call IN
the New York stock market nave
been withdrawing from the. call mar
ket and liquidating part OF their IN m,
debtedness at the reserve banks. All
these circumstances combined to limit
the amount of money offered on call
on the New York EXCHANGE, with the
result that monev scared to III and
IS per event, the latter the highest
recorded since the beginning OF the
war.
As to stock speculation the impress
sion has been generally gaining
ground that both as to the volume OF
daily transactions and the altitude to
which the prices of many Of the in
dustrials have been pushed in reck-
less trading the matter has been very
much overdone; that the insiders
have reaped big profits at the expense
of the general public and that reac-
ton is now to be expected.
The downward trend of the market
has been quiet and rderly. free from
panicky condition. and unaffected by
unsettling influences which are almost
always present in bear market.
Short sellers have been conspicuous
for their absence, for the reason that
stocks are held in strong hands, the
floating supply is comparatively linn
tied and there is general impression
that stocks NAV be released in great
quantities when the bears are about
to cash in theeir perspective profits
The decided recovery in prices
which came later in the week, was on
the whole to be considered as a rec
ignition of the essential soundness
OF business throughout the country
and refusal to let the downward
movement develop into a runaway
market. 1t should not, however, be
regarded as necessarily signifying q
renewed continuance of the upward
movement of quotations on a purely
speculative basis There is a. decided
feeling that many stocks are being