The sun., 1919-06-30
HIGH MONEY HOLDS
BACK SPECULATION
Sharp Rise in Call Loans Is an
Incident Of the July Div
idend Period.
MARKET PROFESSIONAL
Financial and Business Worlds
Have an Exceptionally
Bright Outlook.
PROFESSIONAL

ments In the money situation. trading
on Wednesday declining below the mil
lion share level for the first full day since
early April, and the movement losint
much of its enthusiasm. IL was largely
a traders market, in which the familiar
tactics Of spectacular advances in one Of
more highly speculative shares failed e
excite much popular response Ina
hesitation was due directly TO further
advance in call loan rates to 15 per cent
and banks Discrimination to enlarge
loans on speculative collateral during
the week in which the heaviest payment,
on the July dividend account were be
ing financed. That uncertainty did mo-
lead to heavy selling, and the seasoned
shares ruled for the most part firm with
noteworthy strength in some quarters
But the market lacked the snap OF pre-
vious weeks and there was little Of tn,
enthusiastic support so apparent through
out the earlier campaign.
Changed Conditions.
That change Of tone was due chiefly 70
growing money market tension. nervous
ness because of delay In signing tn,
peace treaty and uncertainty as to JUS
what would be the effect on our indus
tries of the huge reconstruction outlay,
financed by American banking interest,
for European account. It was realized
also that the outward gold movement
with its heavy shipments TO South Amer
lea, Japan, China and Spain was assum
ing sufficiently large proportions to Civ,
rise to the prediction in London banking
circles that the period of easy money II
America had passed. That suggestion
was due In part. no doubt, to apprecia
ton by foreign fnanciers OF the immens
task confronting us in financing the ex
panslon of our foreign trade at a tim,
when the rest of the world was clamor
ing for pretty much everything produced
or manufactured in the United States
The London banking community Is mucl
more familiar with the details Of sucl
foreign trade undertakings than we ar
and it is not surprising that inception o
an outward gold movement from thi
country just at the moment when ou
bankers were organizing a powerful syn
dictate to extend immense credits to Eu
disc should suggest to foreign financia
experts immense demand for credit &C
commodation here.
This does not mean that there will not
be plenty OF funds for legitimate Dor.
rowers or that our banks will be forced
to curtail advances to trade channels
But IL emphasizes responsibilities of a
nation called on to restore Europes In.
dustrial organism to normal production
basis. The world Is doing business al
an abnormally high price level. which
means that the amount of the daily
turnover is very much greater than that
required before the war began. This
country has the task OF financing the
movement of the most valuable crops
ever raised. That demand Is here and
within the next few weeks the banks OF
the cities adjoining the sections OF har-
vesting activity will be called on to
finance the heaviest payroll require
ments that the wheat and corn belts
ever developed. The railroads are rush.
ing cars to the West to provide for the
seaboard movement of wheat and to ex.
pedite the shipment of various produce
TO the markets OF the East and South
The wheat movement this year will bring
wealth to the largest number OF indl.
vidual producers who ever shared in such
an operation. This Is because the ter
acre farmer. protected by the Govern
ment's price guarantee. had Just as sure
market for his wheat as did the great
IA rr1inn conpa MAS nparafinu> mn aore
tracts.
This has strengthened the position OF
the hundreds of small trading centres In
which merchants thrive in years OF
bountiful harvests and are apt to find
poor pickings IN seasons OF reduced
acreage and crop failures. In the ef-
fort to provide for the largest business
they ever did. those country merchants
are making record purchases from West
| ern and Southwestern Jobbers. That de.
| mand is interesting and shows that the
country merchant is fast recovering from
| his fear that a precipitate drop in prices
should find his shelves bullying with high
cost merchandise. This revival of ac-
tivity in the farming sections means
| larger trading for the distributing cen.
| tres, which in turn rely on the banks
| Of the central reserve cities for accom-.
mediation needed In a period of broad
| business expansion. 1t Is the develop
ment of just such a nationwide Dor
rowing demand at time when a huge
| foreign trade syndicate Is puttins
through a delicate operation in American
| finance that the Federal Reserve Board
has In mind when 1t seeks TO trace the
uses made OF funds derived from redis-
count operations with the Federal re
| serve banks.
The Future.
| Any discussion OF money market ten
denotes must reckon also with the bur