The sun., 1919-07-28
FINANCIAL NEWS
AND THE SITUATION
Some Great influences Making
for Sustained Firmness
of Prices.
RECORD LOANS BY BANKS
Reason for Expecting Further
Enhancement. Of Values
Of Securities.
RECORD LOANS BY BANKS
ny WILLIAM JusTUs BoIEs.

Partial recovery OF Foreign exchanges,
following a recession to the lowest level
Of modern times. and extremely inter-
esting developments In the investment
situation In tho stock market and in
the efforts to organize heavily capital
lied foreign trade corporation to super
wise granting credits to foreign GUS
toners OF American Arms have con-
tributed fresh interest to the outlook
for world hnanoc. The crisis in the for
eign exchange market has been Of real
benefit In directing. public attention to
urgent need for immediate cooperation
between mercantile interests and the
most powerful banking institutions In
mobilizing the country's credit resources
for the protection Of our foreign trade.
II Is recognized generally now that II
be imperilled and 1t will be difficult for
American producers to market surplus
production abroad. Inasmuch as the
capacity Of our steel mills alone is
to-day 20 per cent greater than 1t was
when the world war began and while
output Of other Industries has Increased
In proportion IL Is essential that tho
nation should exert every effort to build
a foreign selling organization calculated
to win favor abroad.
II plans of the Dawson committee be
carried out. It will be done, but the
venture 10 too large for the bankers to
handle alone. London bankers have de-
clared that they would not think of
forming a vast syndicate to underwrite
the foreign trade of q great nation
unless the Government became flnan-
cially interested in the operation. In
this country feeling that private inter
ests alone should Join in the undertake
Ing and that nothing but moral sup
port should be sought from the Govern
ment Is strong. In such "a situation 1t
Is apparent that the large mercantile
interests should take hand instead of
leaving 1t for the bankers to do by
themselves. The sensational break in
foreign exchange has SO reduced pur-
chasing power of nations wishing to do
business with us that sellers on this
side have become convinced that they
| ought to extend a helping hand on their
| own account Probability is that the
great foreign trade syndicate will be
| strengthened by admittance of strong
mercantile interests, the support of
| which viii be of great value to bankers
of this country and Europe who become
| identified with the enterprise
Mig Factor in Money Market.
Whether the syndicate be launched
| soon or not, II is clear that the task of
| financing the proper expansion of our
| foreign trade will be the governing fac
| tor In the money market for long time.
Immense aggregate advances will be
required, but bankers and business men
have sufficient resources to put through
the deal In good shape II the money mar
ket be not overburdened in other ways.
Probability Is that the Federal Reserve
Board win see that financing of our for
eign trade be provided for ahead Of all
other demands made on redlscount facil-
tiles of the Federal banking system.
which will be eminently proper. for 1t
must not be forgotten that the country
has marketed bountiful crops at the
! highest average harvesting cost that the
| agricultural States have known Some
Of the interior banks are heavily loaned
| up, owing to the large temporary Dor
! rowings by farmers having to allow their
harvesting hands Sc to $40 a day with
board and lodging.
1t Is apparent that the country has en-
tered period of corporation and for
| eign Government financing likely to tax
| the lending power of even the best
| equipped international money market.
| During the last six weeks dozen for
eign Governments and municipalities
sold loans or obtained from Wall Street
syndicates acceptance credits aggregat-
ing fully $500. 100000. Most of the Sc
curities represented by those offerings
were absorbed quickly by an investing
public that rapidly is becoming ac-
quainted with advantages OF foreign in
vestmenta
Business borrowers Demands.