The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-04
FINANCIAL NEWS
AND THE SITUATION
High Money and Living Cost
Inquiry Depress Prices
in Stock Market.
CALL MONEY ADVANCES
Urgent Need Of Prompt Action
Toward Stabilizing Rates
Of Exchange.
CALL MONEY ADVANCES
NJ WILLIAM Jusrus BoIns.

NJ WILLIAM JUsTUs BOIEs.
Unusual Developments last week in
the worlds securities markets en-
phasized complications that have arisen
from the unrest over high living costs
and the growing need of intelligent ac-
tion in this country toward providing
credits which foreign consumers must
have IL they are to continue purchasing
American merchandise and supplies. The
whole world 10 seeking to readjust liv-
ing costs. and France. italy and other
countries. In which distress has been
much more acute than II has here. have
taken drastic measures to increase their
stocks OF foods available.
Wages and Food Costs.
The crisis in this country developed with
the demand by railroad labor that re-
lief be forthcoming quickly or the Gov
eminent grant $4,000 men further in
crease of wages. That announcement
was coincident with moves made by
Michigan, Ohio and other States to in
vestigats the actual basis for high food
prices and ascertain the status Of vari-
Gus industries with reference to storage
stocks and production outlayA The War
DEPARTMENT made haste to sell its enor-
1
consumers and officials Of the Depart
ment Of Justice and the Federal Trade
Commission evinced great interest In the
problem Of food distributor and the
efforts to END proflteering. Those de-
velopments naturally occasioned un-
settlement here and abroad, causing a
confused movement of security prices
and fears lest the disturbance should
Become more acute. There IL reason to
haM hat xu-f4h N
progress. the rise In commodity prices
will be checked and q basis for united
action for permanent relief developed.
Those incidents influenced an unoer-
tain movement of security prices here
with q material decline In speculative
activity. The technical position OF the
stock market has been strengthened by
the liquidation that has taken place and
the elimination OF many weakly held
speculative accounts Selling was In
duced also by the sharp rise in call
money rates. due in part to withdrawal
Of interior banks from the Wall Street
loan market Hundreds of interior
banks are confronted with q broadening
demand for accommodation from bor-
rowers In the harvesting sections Of the
west, the Southwest and the Northwest.
Those demands In many instances be-
came 50 urgent, last week as to enforce
by Offers OF Is per cent call money. to
withdraw their funds from this market.
Inasmuch as the Wall Street banlts
were not In q position to take over those
loans even II they had been inclined to
disregard the admonition OF the Federal
| Reserve Board about enlarging their ad-
vances on speculative collateral during
tho period when the harvesting sections
are calling for funds, there was n gen.
4 linz Arxryr Ne IN
mitments. AZ consequence Of that
selling thu stock market has had a
healthy reaction and prices are at n
| level which shows that q good deal of
| defiation has taken place.
That situation Is very interesting and
brings up the larger question as to the
future Of our foreign trade and the abil-
ity of the largo banking interests to
| obtain cooperation between borrowers
| and lenders necessary to extend the re-
quired assistance. Charles H. Sabin IL
right IN urging an amendment which
| will make possible tho War Finance Cor
| poration extending credit to foreign
borrowers In good standing. with the In
dorsement, II need be. Of foreign banks
or foreign Governments. That action
would make available quickly $1,000
ooh.O of credits which Congress APP
propriated for the promotion Of our
should be limited and made only through
American corporations. Endorsements of
which were required.
II The War Finance Corporation. al
though possessing machinery for making
those ioana. has done little or nothing
toward promoting the foreign trade OF
this country. The managing director has
been willing 20 do what he could to as
sist the movement, but the amendment
lad IN ha
poration's extending q helping hand
The consequence IL that that greatest
Of all lending institutions. although
having authority to mako advances
aggregating $1,000. 100000 for the
promotion Of our foreign trade, ac-
tually has been neglible factor
In the situation
Deadlock I'm Foreign Exchange.
The whole world is looking to tho
United States for help in this greatest
Of all after war emergencies. The nee
essary credits must be provided II our
foreign trade Ia to be safeguartied ado
quately and aid urgently needed by Eu-
ropean countries forthcoming. The sit
uation In the foreign exchange market
is Becoming more serious every day In
which rates are left to md their natural
level. In ordinary times such course
might De JuSttneos pus thero Ch4lnot ue
, any excuse for II In an occasion like
this, when stricken nations are iookina
to this country for help. For other rea'
cons the existence Of Buch . stupendoui
international trade balance as s4.12e,'
o0o, 900, exclusive Of silver exports
which the United States accumulated
during the FISCAL year just ended. y un
fortunate, as 1t really hampers NOR
trade with those countries that are In
dsbted TO US.
| That condition IL because the rest d
the world ia not able TO adjust its In
deStedness to this country through ex
Grunge Of goods or services In the or
binary way, but actually Il forced Il
J purchase New York exchange at pre-
: MUM 20 high AZ to add 10 per cent
in the case Of merchandise purchased
by our customers In Great Britain 10 al
much as 70 per cent In the case Of pay
msnts made by customers In Germany.
Judging the situation from another
angle, II may be said that the New Yori
price for London exchange IL selling a
such a discount as to enable INVESTOR
| 11A nANEy RrfHRh VictOfl