The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-12
FINE RECORD MADE
BY THE BANKS HERE
Advancing Market andVictory
Loan Drive Caused Heavy
Borrowings.
ALL DEMANDS ARE NET
Expected Revival Of Industry
Results in an Optimistic
Outlook.
ALL DEMANDS ARE NET
ny WILLIAM JUsTUs BoIEs.


poses heavy burdens on the banks. A
persistent advance lasting several weeks
has established numerous securities in
what is known as the high price area,
where the new 20 per cent. commission
charge becomes effective and heavy Dor
rowings are required to sustain margin
trading. Never before have the Wall
Street lending institutions given q bet
ter account OF themselves than in the
financing OF these record speculative
commitments in the closing week Of a
$4,000, 100000 Government loan cam
paign.
No Money Pool Supervision.
There has been no money pool in con-
troll of the market and the Federal
Reserve Board has kept its hands of.
Yet the New York banks financed the
prodigious payments-of last week Just
after the record tax instruments had been
paid to the Government without a furry in
the money market. It was a remarkable
test Of our Federal reserve system and
showed that the centralized service is
as near 100 per cent. efficient in n money
market crisis as anything devised could
be- The New York banks are showing
superb cooperation in a partnership be-
tween Government and business, which
means much for safeguarding of Amer
lean fpance during the reconstruction
upon which the country Is we'll advanced.
The machinery of the money market
probably never has been more severely
taxed than in these days OF record in
come taxation. Victory note subscrip-
lions. extraordinary stock market ac-
tivlty. immense semi-weekly sales or
Treasury notes of indebtedness and ad-
vances to corporations requirements OF
which are usually financed through di-
rect appeals to the investment markets
The striking outburst of speculative
enthusiasm which greeted the publica-
ton OF the peace compact last week was
natural in view OF the worldwide relief
felt that the real work OF restoring In.
dustry to a peace basis could be taken
up everywhere. With the war officially
ended an immense volume OF peace bust
ness will be released for the benefit of
nations possessing requisite productive
machinery to handle II. In such a stu
alton the United States must profit enor-
mously, since this country has the bes,
industr al equipment and the only ade-
quate credit facilities to support such an
undertaking. There was a quick ad-
vance In the securities OF properties
earnings OF which will be favorably af-
fected by revival of world industry
which the peace compact VIII stimulate,
The improvement extended to rail
road shares. which were helped by tn.
Presidents calling an extra session OF
Congress. It is hoped that Congress will
give attention immed ately to the urgent
| needs OF the railroads and provide for
the safeguarding OF an industry being
nearly ruined under Government control
| The roads face s41s,o00.o 900 deficit, ac-
cumulated during the last fifteen months
1t may be that they would have encoun-
tered troublous times under private man.
agement, which is altogether proba BILE
had the Government continued its policy
| of treating them in a niggardly manner
Real Wealth.
| That considerable portion of the com
munity whose stock market operations
are based largely upon crop condition,
| was quite unprepared for the phenome
| nal showing of the Governments May
| report, naming the highest winter whea
| condition estimate for this season in tho
history of the Department OF Agricul
! ture. Against 1913 per cent. OF norma
| reported in April, the May figure is 100;
per cent, which means, in the judgment
| Of Government experts, a total winter
wheat crop of 500. 900 bushels
| Should that promise be fulfilled. thu
value of THE single crop will be, at thu
price of s226 n bushel. s2.034, 900. 900
| Owing to highly favorable weathe
conditions, only $4,000 acres of tn,
planted area had to he abandoned thi'
year, that loss being the smallest shown
1 for the period. AS conditions in tn
spring wheat area have been favorable
there Is no doubt that the total whea
crop this year will far surpass all pre-
| vious yields and that the value OF tn,
produce and products OF American farm
ers. including animals. will exceed s22.
000, 00O, 900.
With a phenomenal harvest in pros
pect and the certainty that our inter
national trade balance by the close o
the fiscal year in June will exceed 49,.
! 000, 100000. there Is apparently firm
ground for reinsurance of those whit
believe that immense prosperity is II
store for the country. The readjust
ment of industry to peace conditions Il
well under way and instead of depend
ing upon artificial protection of pric,
agreements at variance with trade coli
ditions the readjustment process is pro
ceeding gradually in accordance witt
the law of supply and demand. the onl!
method by which permanent results cal
be obtained.
Victory Loan and Bond Market.
J With oversubscrIptlon of the Victor,
Notes, the inquiry for other investmen
issues may be expected TO broaden, a
there is still a large unemployed bal
ance In investors hands. There are at
tractive loans to be brought out befor
long, since many corporations are badl
in need OF funds with which to make In
provements and provide for require
ments TO be financed. Some OF the OF
ferings are likely to be made at term
which ought TO insure quick absorp
ton by genuine investors. The fac
that the Government was compelled I
raise its interest rate in order to insur
ready absorption of the Victory Note
shows that private corporation borrow
ers will have to name attractive term
in order TO obtain the capital required
It seems as II the bond market wa
nearing a turning point. With the las
OF the popular Government loans out G
the way, the way is open for the larg
volume of corporation financing held /
allegiance until the last OF the war loan
had been marketed.
II those fresh capital applications /
successful II Is probable that the gres
issuing banking houses will attempt In
portant fiotations for foreign acccun
Seldom II ever has there been more IL
teresting stock market situation than this
| hloh - 10 10. FI,t