The Bridgeport times and evening farmer., 1919-12-30

ing the war investment and SpecuIa- tion have been 50 sharply repress- ed, the saving and investing power of the community being diverted into the channels of public credit. Re- moval of restrictions enabled many who had long been prevented from the free use of their funds to apply them in the directions which they considered most promising.
 Development Of Business.
 Several distinct stages have been Included in the year 1919. The first Of these covered the post armfs- tice period, practically extending from the opening of the year to about the conclusion Of the Fifth Liberty or Victory Loan in April This roughly corresponds also wish that within which war restrictions on the issue of securities and the lend ing of money on call were still main tained. It will be remembered that comparatively early in the year the so-caued Capital Issues Committee was allowed to suspend operations, while not very long thereafter the sO-cai1ed Money Pool Committee. which had held Stock Exchange op- erations in check, was also dissolved.
 4 second period then opened and extended practically up to the latter part of June, at which time the open ing of 9 speculative era led the Fed eraI Reserve Board to issue warn inSs against a possible overdoing of such operations.
 During the summer, speculation reached an excited pitch, with both prices and volume Of operations on extremely high plane. Throughout all this period interest and discount rates suffered but little change, the Federal reserve system being unable to ad- vance them because of the unfavor- able effect which would thereby be produced on Government financing
 This third period came to a close practically at the beginning of No vember, when speculative operations reached their climax, the Federal Re serve Board advancing the rates of discount at Federal reserve banks in order to check the expansion of loan funds used in speculative transac- tions.
 A fourth and final period has car ried the market through the months of November and December and seems likely to continue some time longer Its characteristics have been shrinkage of prices, limitation of volume of business and high rates Lt4 tA4S tiSSe OL (e1ll LuHuS
 Money Market Crucial
 It has been more and more evil dent as the year has progressed that money market conditions were of crucial importance to stock calues. Although during the early part of the year there appeared to be an abund- ance of funds for loan it was shortly evident that this was an artificial condition due to the control which has been exercised over interest rates during the war.
 On July 1 the limitations upon the foreign shipment of gold and silver were suspended, and since that date the movement of gold out of the country has been steady, reserve bal ances being accordingly depleted At the same time the reawakening of tn- dustry and the closer survey of Eu- ropean needs, which has been called for by the fact that foreign condi- tions were so evidently urgent, has shown that there would be far from a sufficient amount of credit to Ego around
 As government restrictions have relaxed, therefore, a very decided tendency to advance in money rates made itself evident, and during the late summer and early autumn charges for call funds began to ad- vance steadily. As available bank lending power became narrower and narrower, these charges tended to in- crease.
 When action was taken by the Fed eraI Reserve Board for the purpose of controlling the growth of Stock Exchange operations, an informal as sociation of bankers practically ap- piled the brakes to stock operations by keeping rates for call money high whenever a disposition to increase demand manifested itself. In these circumstances call rates were at one time forced up as high as 30 per cent.
 Banking Situation
 It has been clear as never before in the history of the stock market that the banking situation was of dt- rect significance and that it's position could be clearly measured and under stood.
 In former years this banking posi- tion was much harder to trace be- cause of the scattered system of re- serve holding. When New York banks were short of reserves high rates in / ,-I- d.