The Washington times., 1919-10-22
Boersianer's
Comment
on Business
By BoERsIANER.


NEW YORK. Oct "a sstirsS
jacques may well ask how can NJ
York hope to be the financial hub o
the world with such spectacles as -.
call money rate presented the ~
four weeks? London waH new.
guilty OF similar scenes. nor Paeie
nor Berlin. Until New York beconaA
civilized monetarily. IL is idle To an
cuss its possible nscal supremacy-u
dominance.
Apparently the Federal Reser~
system. of which everything M
expected moneywise. is not . pfV
clusion. The fault may not Be II
the Federal scheme per sc. IL ~
lie In the personnel. or in nstioua
bank and trust company PERSONAL
ties who. for profitable reasonA Dc
cline TO avail themselves OF the 0o<
ernment's facilities. =
This criticism fs prepared for -
retort that the average ratio Of -
serves TO deposits and not circuiA
ton is almost at the lowest In To-
short history of the system-4e 4:
per cent Even so. the limit has ~
oeen reached by 13 is per cent. IN
TACT IL that the Government In ~
little worse than Indifferent d
what Is done TO and In the car
money market
IL may be that the complacenec
OF the Reserve. Board and the IN.
dfnerence Of numerous Eastern bank
ers proceeds from q subconvfctios
that New York as a worlds nnancia
center is. after all. a fartering unc'
tion. easily undeceived by constitu.
tutional and other disqualincationsA
There Is, first of ell. the want OF
compelling incentive. The Unfte3
states can thrive without being II
the forefront of finances Engians
cannot. She is an island whose treas
ures are limited TO coal and iron. n
be prosperous she L. compelled q
lead In finance: must finance u
world at large. must trade with ~
world at large, must invest with IN
world at large. For two and o.
half centuries she has thought 81
financed internationally. Should shs
cease TO do SO. or even 20 pause. ~
would degenerate economically in lea
than a generation
Neither has the unciviiized NOR
tary exhibition made much OF an in
preston on the Stock Exchange elo
ment in New York. The market HIS
gone forward as IL the call rate wsrs
normal; indeed. the concern Of oh
and staid commission houses IL mo-
the demand money rate. but thG4,
liabilities IN
To such pass have conservative
stock brokers come that they instg
upon choosing their clients ana tn
stocks TO be purchased.
Average brokerage firms. while not
90
never before. Both classes are really
bewildered by the tremendous busi-
ness on the Stock Exchange. Thsy
no longer give advice confidently:
they seek advice: difference sbso-
lutely novel in brokers parlors
No sooner does Bostonisn app@ns
in Wall Street than throng oi
habitues ask him what be thinks oI
Coppers AHChicagoan Is warmly Neh,
coined as a prophet of Studebakef
Steel Foundries, Rumley. Harves<5k
Sears-Roebuck. the Erangers and -
on. Yet with all the humility. brakks
and supercsutious, the bourse, takins
one week with another seethes: 81
overwhelmed with orders from al
parts OF the country and from abreaA
Were the status of the railways Ae45-
nitely fixed-permittfng Of free traa
iht III thtcc chdISS-NuS loSlffAtS4 y
the Stock Exchange would be woe
fully inadequate TO cope with the
business
The hesitation and timidity Of thu
Cogno scetti is simply overborne ~
Sspiene populi: the public takes NJ
stocks IL need be: furnishes whateve3
margins are required; sells now ant
then to appesse brokers-only to re-
buy at higher prices-but the national
assumption of a continuance of str
higher quotations for securities n
such that frequent attacks on the
market by seasoned traders and the
trammels of old line commission
houses are overcome. though siumps
occur and must recur at intervals.
Pure-or wild speculstion-is no
the entire motive power. Many In
dustrial certificates yield so high 70
turn on investment-despite the TAI
that a surprising number OF fnvee
tors are reSorting to this held fos
their placement. the expectation os
an increment OF the capital eeingDs
further inducement
The embarkment Is understandable
although it may not be approved ~
bond men, who offer per cent
return on a (tsx-exempt) municipal
issue. StiT. bonds that offer Per
cent net are not numerous. For .
taxable lien to yield per cent .
gross return of is per cent vsrs
necessary.