The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-18
FINANCIAL NEWS
AND THE SITUATION
Speculation in Stocks Is Held
in Check by Various
Factors.
MONEY BECOMES EASIER
Cost of Living Inquiry and
Many Other Important
Developments.
MONEY BECOMES EASIER
~ WILLIAM Jusrus Bo1ns.

have set themselves TO the task OF max
ing profteering about the most dishon-
orable occupation on earth. Tho crusade
will be pushed vigorously until the worst
evils have been eliminated and advanc-
ing prices for the square meal COM
modities- are no longer fashionable.
This will take time and as always
happens in such circumstances the re-
form may be carried to extremes, as
is pretty sure to be the case when the
American people become lighting mad.
But the problem of high living costs will
never be fully solved until the Govern
ment itself reduces its scandalously high
expense ratio and the 10e. 200. 900 Ameri-
cans once more set about the accumu-
lation Of a respectable rainy day fund
sound Sense.
Gov. Harding of the Federal Re
serve Board is right in emphasizing the
need of saving more and producing more
as the two reforms that are most essen
tial at this time. With diminishing
hours OF labor the industrial output Is
sure to decline and as supplies are re-
duced prices are naturally advanced.
The whole country. therefore. Is face
to face with the need OF reducing Its
luxury OUTLAWS and SO organizing its pro-
ductive facilities as to secure the larg-
est output possible. With this done the
problem of relieving social unrest will
be simplified and the resumption of nor
NAL living conditions will be less diff
fcult.
In all these considerations It must be
remembered that the United States is
holding a position of high responsibility
toward the rest of the world. for, the
crippled nations of the war area are in
dira need OF our help. which cannot be
provided on an adequate scale unless
the countrys production is materially
increased.
In the presence of these difficulties II
is not strange that speculation. should
be checked and that the whole market
should assume a waiting attitude. Its
technical position has been materially
strengthened by the liquidation that has
taken place, for the pyramiding Of &C.
counts has ceased and the evils incident
to the furious speculative movement OF
the last few months have been largely
eliminated.
In the course of the sharp declines OF
| the last ten days many of the shares
| that were advanced so sensationally
through the manipulative tactics of pool,
and bull traders have returned to the
normal price level once moro. In thi.
| way the explosion hazard" which 1:
always a factor of importance in bull
market of large dimensions. has beer
materially reduced.
| With the falling off in trading thu
pressure upon the money market hai
1 nd IL n N,
reason why the Federal Reserve Boar
| should undertake to regulate the lending
operations Of Wall Street banks. Thi
means more than most people imagine
for the possibilities of disturbance in
| stock market situation which had com
| to be largely financed through the Stool
Exchange loans made by interior bank
are much greater than. are those en-
countered at times when the Wall Stree
loan account is sustained chiefly by ad
vances made by the great financial in
situations Of this city.
West Likely to Demand Money.
This is because the interior bank,
which few weeks ago had more none
loaned on cal! In Wall Street than eve
before, are subject to- sudden demand
from their own customers in the grea
producing area of the West, and are OF
ten forced to call in their New Yor
loans at moments notice. This
apt to happen when the harvest move
ment is in full swing. and explains tn
alarm felt by the Federal Reserv
Board at the immense increase in tn
volume of collateral loans. 1t is urge
also that the growth Of the Wa
Street loan account Of out of tow
banks is apt to be at the expense Q
Il g.
the detriment of commercial borrower,
1t has been specifically charged tina
instead Of purchasing acceptances an
commercial paper the interior bank
have made large loans on call in Wa
Street because of the higher interes
rates which obtain for such accommoda
ton. At time when 1t is of suprem
Importance to create large credit bal
ances in this country for recourse b
the foreign purchasers of American SUP
plies the policy of financing a vast stoc
market speculation with funds supple
by lending institutions in Chicago. Phils
delphia and other large cities is preju
dlcial to the best interests of the AmeI
lean people.
For these reasons reduced specult
tive activity during the period whe
the harvesting sections of the West an
North are called on for .unds relieve
the tension of the interior none
market and increases the supply {
funds available for mercantile borrower
Foreign Credits.
Although the proposed foreign cred
. syndicate is still In allegiance the gres
banking houses OF Wall Street hay
undertaken to market s650,000. 900
new securities within the last sixty day
Much more than half Of this amour
consists Of foreign bond offerings an
foreign credits, the proceeds of whic
. will be OF the greatest service in e.
panding our trade With foreign countrie
This new financing is a serious burde
upon the money market and since thei
is a great deal more to arrange Il
the total movement will require 9
immense aggregate investment. A
operation of this kind could not
properly handled II the banks we
forced at the same time TO NAL
enormous loans to borrowers upC
speculative collateral.
It Is obvious, therefore, that Il
: partial let up of speculative activit
4 has been Of real benefit to the country
bank position in that It has released
| large amount Of money which II need'
/ to meet extraordinary requirements al
to take care Of the unprecedented d