Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-06-02
WARNING IS GIVEN
J Chico EXPANSION
National City Bank Would
Clamp Lid Down on Wild
/ Stock Speculation.
LOCAL MARKET FIRM
BY I. A. FLEMING.

p BY I. A. FLEMING.
The National City Bank of New
York has taken the initiative in sound
ing a warning on the speculative ex-
pansion in the New York stock mar
ket. The leading financial institution
has simply started movement in the
interest of conservatism that is likely
to result in higher rates of discount
for call loans and perhaps the clamp
ing down of the lid so hard that in
forced liquidation will follow.
4 For nearly four months the Wall
street market has been on a wild RAM
page, and a million and even two
million shares day have been of al
most daily occurrence.
There seems to be so much money in
1he country, so many who have per-
sonaAy- benefited by the war, new peo-
pie, that they have taken the stock
market away from the professionals
entirely. or made their operations sec
ondary.
At no time has the speculation been
more active than this morning ana
this, too. in the face of the action OF
the big bank in urging that specu-
1ative imitation he checked. Brokers
who carry tens of thousands of shares
of stock on margins have extended
their loans far above the billion DOL
lar mark and will need much more
money if this kind of speculation con-
tinues.
II may be that the federal reserve
board may find it necessary TO aid
conservatism by an advance in the
discount rates of the regional banks:
1t would seem as if the action OF
leading financiers. if it is taken as
suggested by the Vanderlip institu-
ton, might even suggest such
course.
In the June circular of the National
City Bank release today appears the
following:
; We have repeatedly given warning
that the danger of financial reaction
was not to be apprehended during
the war. or as a. result of the credit
expansion for the war operations, but
, from speculative and industrial ex-
pansion after the war. While the
war was on, the requirements OF the
government put restraint upon
nrivate credit exceyt as it was used
in forwarding government operations
and had government support behind II,
hut with this restraint removed. there
"a the possibility of imitation over ana
beyond that already occasioned py
khe war. The time for watchfulness
and caution, and for safeguarding our
credit resources Is now.
AS a first proposition let 1t be SAID
that any further expansion of credit
beyond the great volume created 10
drive the country's Industries at war
pressure is unnecessary and unde-
sirable 1t was not absolutely neces-
.sary even for-war purposes; we could
have gotten along with smaller use
of credit If we had been more resolute
in the curtailment of private con-
sumption but in view OF the world
situation large degree OF innauon
was unavoidable. 1t has caused
great rise of wages and prices which
docs nobody any good except as II
does other people harm, or. in other
words, as it takes from one to give to
another. Thousands of persons VINO
are so situated that they cannot
readily have their incomes increased
. to correspond with the general rise
are suffering injustice. and they are
not, as a class, the rich people
Washington Loan and Trust Co.
The Washington Loan and Trust
ACompany is very proud of its record
in the Ave liberty loan campaigns.
Its total allotment for the five was
B., 200. 900; its total subscriptions, S10,-
301,150. or 9s.1S per cent oversub-
scription.
Subscribers to the number of 1880
participated in the establishment OF
this record.
The quotas of the five loans and the
subscriptions taken were as follows:
First loan. quota, s529 500; sub
scriptions. s1,2l4,55o. Second loan m
Third loan, s74S.5GO;, subscriptions.
s1.7l6,750. Fourth loan. s1,59s,600:
$500, $50. Fifth loan, $1.4s5, 500; sub
-,rin,;opc Sins2O7 en-