The sun., 1919-06-16
FINANCIAL NEWS
AND THE SITUATION
Stocks React on Developments
in Money Markct--Reserve
Board Warns.
ABANDON EXCHANGE BANS
Market Waits to See Effect of
Impending Changes in
Loan Situation.
ABANDON EXCHANGE BANS
ny WILLIAM IUsTUs Roles

eAuefney interesting Developments In
money conditions last week and the re-
suit was increased selling pressure with
a sharp decline In prices and virtual
abandonment Of the manipulative tactics
used efrectively In the earlier campaign.
Tho average trader. whether he admits
It or not, 10 usually Impressed by the
warnings Of the Federal Reserve Board
and the unexpected announcement that
the board had begun an inquiry into the
status OF speculative loans In their re-
aaron to rediscount facilities Of the Fed
efal Reserve banks recalled what was
uone some months ago when the money
pool committee assumed regulation of
the lending operations OF the broLera 20
eouses. The move by the Federal Re-
serve Board directed attention also to
the preparations by the banks OF the
country to finance the second instalment
eseregating $1,100.0 100000 for income
taxes at the close of last week and to
PROVIDE for Immense corporation dis
oursements. which win have to be reck-
oned with during the semi annual divi-
oend season Just at hand.
In such q situation Il was natural for
tne stock market TO take notice of the
money factors which usually gain promi-
nonce towards the close OF June. The
further rise in call loan rates emnha.
sised the growing burdens on the banks
IN financing q speculation, which. In
some respects. Is the most interesting
mat the country has had since the war
began. The rise in Victory az per cent.
oonos rejected the broadening demand
TOR tax exempt issues and Indicated that
.ne public Is not deceivtng itself about
the TAX situation, but looks for n con-
nnnance OF such burdens for some time
70 come. The relative firmnes. of All
government issues shows that the quiet
description or high grade bonds has be-
come an important feature OF thu bond
market and that the process Of anticIna, :.
ing the receipt OF July dividends account,
TOR most or the strength manifested nv
securities OF the safe investment class
Ihis Is good sign, the movement nav.
ing its basis in the growing belief tina,
| the readjustment Of industry 10 peacs
conditions Is making excellent prosrsss
In this country At least.
Wire Strike May Brine Trorn,.
Another factor contributing 70 un,et.
tiement OF security prices was the com.
phcations In the labor situation and The
e1line out OF many thousand men en-
possibility Of countrywide interr,,ntion
or electrical communication Mt the mo-
inent when the development of Industry
- making heavy demands on the tele-
graph and telephone was disturbinr
should those complications deranre the
wall street wire service great snnov-
snoe would result, although the proba-
unity Is that some way would be found
TOT continuing Stock Exchange business
On = Ieouced basis Those episodes
emphasize the overwrouEht position n,
the labor market. which contrasts MOS,
havorably with the extraordinary situa-
ton abroad. There is little doubt that
the problem will be satisfactorily solved
mere after the usual backing and filling
between employers and employed.
But conditions in Europe are much
more troublesome and threaten danger
GUS consciousness unless the strike called
TOT to-ady In Paris Is averted or
promptly quelled. Tho situation 4. ON
OF explosive possibilities, since an indns-
trial crisis has been brewing in France
Italy and other countries for some time
ana II Will be difficult to put Industry on
us rect until satisfactory agreement
snail maze been reached, which give.
point to the necessity OF having Germany
sign the peace compact without DELAY
and prepare the way for restoration Of
industry everywhere. Nothing can be
oone until this step shall have been
taken. because the legislatures of the
different rations cannot act on she
treaty until the Paris formalities shall
nave been completed. Developments IN
the foreign situation during the coming
fortnight are likely to have very impor-
tant bearing on security trading In New
York and London. The speculative i'm.
pulse In neither of those markets ha.
spent Its force and the probability Is
that the movement will broaden sf,ar
the historic document shall have been
signed. sealed and delivered.
Greater Prosperity IL Outlook.
With a record harvest practically as
sured and most of the world clamorinp
for our foodstuffs. merchandise and raw
materlal. there IL much In thu o,,tlaoir