Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-06-14
MARKET SUBSIDIES
|. UNDER US HINT
Wave Of Speculation, Beyond
Capacity of Banks, Sobers
Down in Week
REIMBURSEMENT INFLUENCE

New York. June 14.-The bull mar
ket started the first week of April. In
the succession of million share sessions
since then, and the broad advance in
prices to this week the wonder has been
growing that this country, great and
wealthy as it is and physically un-
scathed by war, should. with all its
other financial burdens, be able to
hnance movement Of such scope.
I if the stock market depended wholly
on the banks for money to keep it going.
Its rampant bullishness would have come
to an end several weeks ago in =. all
probability in other words, the momen
tum OF speculative enthusiasm prolonged
the stupendous game of chance far be-
yond the point at which banks would
have deemed it prudent to countenance
it unreservedly. The danger in fever
OF this sort lies in its propensity to
spread out into fields where. behind the
scrubble, wait the INSCRIPTIONS to sell
gold bricks to the unwary and unso
phisticated. 1t is an unwholesome thing
when clerk, stenographers, buffers and
bricklayers fall prey to that fever.
1t was about n fortnight ago that the
Federal Reserve Board issued it's famous
warning This was followed shortly
by directions to member banks in the
reserve system to give information con =
corning loans made with government
bonds or other government obligations
as collateral. 1t was not explained why
this was done. but the explanation was
pretty close to the surface. In nut
shell, too much money was going into
| speculation. Government financing. in
war sense. is far from completed.
Secretary Glass denied statements to
the effect that there would be still more
public loan offerings, but the govern
ment must, nevertheless. have a great
deal of money for considerable time to
come and. for that reason. it is i'm
pcrtant that rates should be kept down
1t must get its money from the banks.
The burden on the banks does not end
there. The process of readjusting the
| country's economic life and putting it
in training to take advantage of interna-
tional trade opportunities, entails a vast
amount of commercial and industrial
financing. This has already assumed
large proportions in recent weeks. Under
these circumstances it might we'll be
asked whether the government can per
nit unrestrained stock speculation to
compete with it for funds.
Market Has Subsided o..
Wall street took the hint and this
week the market subsidized. The way
in which the change came about was
welcomed, as the previous rapid pace
was highly suggestive of possible bad
break should any untoward event come
along to precipitate it. No one is. as
yet, willing to go on record as stating
that the bull market has come to an
end. The advance in call money rates
since Tuesday. eliminating yesterday
in II per cent for mixed loans and
~ per cent for all industrial collateral.
and the reluctance Of bankers to supply
time funds at per cent bids. may pos
sibly have been the result of an effort
to discourage resumption Of speculative
| activity in anything like the proportions
| which have gone before. but the prin-
ciple of supply and demand for money
cannot be ignored certainly.
Next Monday is the last day for
the second installment of war taxes and
1t is probable that payments on this
| account were made throughout the
week. 1t is estimated that the treasury
will receive $1,000, ZOO, 900 from this
source.