The sun., 1919-09-08
FINANCIAL NEWS
AND THE SITUATION
Ruling Factors Which Make
for Increased Activity of
Stock Market.
EXCHANGE is AT CRISIS
Unrest of Labor Is Worldwide
and Many Influences Are
Back Of It.
EXCHANGE is AT CRISIS
BY WILLIAM JUsTUs BoIEs.

affecting the labor outlook, the money
situation, the foreign exchange market,
railroad legislation, the peace treaty,
social unrest, the Investment demand
and the future of the country's foreign
trade. In no week since the ermistice
was signed has % much Of great import
happened here and in Europe to throw
interesting light on the longer financial
future. Wall Street interpreted these
incidents as on the whole reassuring
and, although the most striking response
was In the quick rise in the highly
speculative shares, there was a gen.
orally better undertone to prices. A
noteworthy incident was the better de-
mand for bonds which showed increased
firmness under the influence of the sort
of investment buying which often makes
itself felt in September. The down.
ward trend of commodity prices is apt
to be attended with revival OF bond
trading. Whether this has been an i'm
portant influence or not, the fact 10 that
declining quotations for agricultural
products In the great primary markets
have been accompanied by o broadening
inquiry for the splendid investment bar
gains that sill can be obtained
Public Participation.
There IL good reason to believe mat
the public participation IN the securities
market will enlarge as the more pressing
problems in the economic situation be
solved, The country Is to-day doing an
immense volume of business on price
basis high enough to show fair margin
of profit. If the labor leaders succeed
in holding the radical element in check
and averting strike disturbances for SIX
| months at least the country will beneht
cd ,nrOdnOtiOn
at a time when 1t will be OF the most
avail Only through larger Industrial
output will 1t be possible 10 arrest the
| rise in living expenses and abate the
evils which are at the bottom or most
of our industrial unrest On that point
| the most emphatic testimony was given
last week by Frederic Harrison in his
warning to organized labor about inc
peril confronting Great Britain to-day
| zone hundred millions In Europe Mr.
| Harrison said, ARE on the verge OF
Starvation. Not a third Of the industrial
power of Europe Is at full working enl-
| cheney. Man for man the American Is
| producing three times that Of the Briton'
Our central power in coal Is going out
| The nations around us are driving us
out of our markets abroad ana even
AZ home. We cannot go on working hve
davs for six hours II the foreigners
work six days for eight or ten hours
An Urgent Need.
That is the problem which the labor
conference ought to devote itsen 70
when the representatives OF capital
labor and agriculture assemoIe aui .,,s
next month in Washington. With the
| miners asking for a thirty hour week
and other industries seeking to shorten
their working days, II is time that laoor
| leaders realize the impossibility or re-
ducing living expenses If the output q
INIT of labor is to be seriously curtailed'
The situation in that respect is much
better here than in Europe, but 1t VIII
not continue SO unless the conservative
element in organized labor retains con-
troll The forty-hve delegates TO the
WASHINGTON meeting ought to form them
selves into a production conference az
soon as the proceedings open four weeks
from to-day. If that be. done. Idle men
will return to work and within a rev
months surplus production will go far
to make up for a portion OF the waste
caused by war. The whole country
would be benefited by such move
ment as earnings would increase, IN
dustrv revive and foreign trade situa-
ton be further strengthened. AS direct
consequence of the increased output
prices would be lowered and reaadtust'
ment to peace conditions promoted.
Crisis in Foreign Exchange.
Such Increased production would force
action to relieve the deadlock in for
eign exchange, caused by embarrass'
ment of riches, represented by the coun
try's fabulous trade balance. It seemi
good to think that the rest Of the world
is heavily in our debt, but as a matter
Of international commerce 1t means
that nations. which would purchase our
surplus production, virtually are pro-
hibited from doing business with us be-
cause at the low level OF the week New
| York exchange on Paris and Rome sold
on a basis which advanced the premium
on dollar credits in France to 81 pei
cent and In Italy to So per cent. lr
terms of day to day trading that means
that a French importer Of American
merchandise would have to pay $1,37(
for every $1,000 purchase OF American
goods while the italian buyer would havt
to gtvo up the equivalent OF $3.50 FOL
the privilege Of doing $1,000 of business
with u.s. Those quotations represent the
highest premium that dollar credits have
commanded In those countries and re-
fleet a situation which is 30 urgent al
to force this nation to summary actor
unless it's business interests are OBJ
liViouS to the foreign trade opportunity
which the war has brought.
American bankers and business men
with or without Government assistance
must rise to the occasion and somehow
collect a credit fund large enough Il
enable our foreign customers to do bust
ness with us on reasonable terms of ex
change Great Britain has devised |
scheme for extending credits to buyer
in territory In which adverse exchang
rates impose an insuperable barrier 4
commerce. The problem here Is mucl
more complicated, but 1t Is surely to ou
advantage to conciliate foreign trad
and extend credits which must be forth
coming II foreign nations are to d.
business with us in large way, Man,
of the great foreign railroads are ask
ing American equipment companies Il
fill large orders for locomotives and othe
supplies on terms which extend the pay
lments over a period Of FIVE or ten years
An immense volume of that valuabl
business is being held up until the neces
sary credit arrangements can be made
President Fletcher OF the American
Locomotive Company Is right in sayin
that foreign railway equipment financ
corporation should be formed to han
die such transactions. That should b
. done Immediately as the rehabiiitntio'
OF foreign railroads is IA matter OF ia
greatest importance and there Is no rea
| son why American bankers and bust
ness men should not organize a corpora
tion to finance those requirements TIL
task should not be left to the bankers