The Bridgeport times and evening farmer., 1920-06-22
HENRY CLEWS'
 WEEKLY LETTER

Great Britain's negotiations with the Soviet representative, who has been sent te Lenden, constitute the principal development of the week in the foreign field and seem to form the basis of considerable anxiety in European diplomatic eifoaos. That the situation will affect tAe United from certain. The oontention of the Russians that they have no respon- sibility for the debts of the old regi- me In Russia, including everything prior to 1917, had been expected, but door of compromise is left open by the suggestion that the Russians, if expected to settle the old debt will also expect to inherit the claims, rights and privileges guaranteed to the old Russian Government
 How this may work out is an in teresting problem, as 1t might con- ceivably result in the assumption of some of the old Russian debt by the Allied Powers in consideration of the cancellations of Soviet claims to Con- stantinople, territory adjoining Per sia, and other dangerous possibilities of the same sort.
 Meantime the anxiety in France with respect to these questions, not only from the political but also from the financial standpoint, is very ob- vious, and is perhaps partly respon- sible for the increasing disposition in France to abandon all intent for the present moment of supporting the proposed Allied conference at Spa, whose chief purpose was expected to be that of settling the amount and method of indemnity payments. From these various discussions the United States is necessarily excluded because of our refusal to define our interna- tional status and to act accordingly. There is no certainty as yet how our financial interests, as affected by these changes. will be protected. if at all.
 Frozen Credit and Investment.
 The money situation has continued practically unchanged during the week with call rates varying from ' to 8 per cent. or occasionally a high CT quotation for a very short time. Time money has been relatively Scant in supply and with rates practically stable, while a similar situation has existed in the commercial paper mar ket.
 The advance of the reserve ratio at Federal Reserve banks by about 1-2
 
 it went, but was insufficient to give any great promise of decided inn provement in reserve conditions. In Great Britain there has been a de velopment of much stronger popular feeling against higher discount rates at the Bank of England, with at least a suggestion that lower rates may be forced. This is avowed1y because of the effect of present rates ir limiting business. The experience o1 Great Britain is practically parallel to that which we are passing through in this country.
 tion has tended to grow more az gravated, rather than less so, due te the fact that not a few enterprise: which have shortened their activitie. on account of the high cost of money have apparently put themselves into | a less favorable position from the standpoint of Iiquida ton. Whether | this may not tend to administer [ l check to the high money movement ! and at least to prevent it from going further is certainly wdfthy of con sfderation- There is a reasonable | point at which to draw the line anc many believe that it has been reach | ed and that the demands of extre l mists for more strenuous application | of credit restrictions and higher rate l will be disregarded. There is 1 growing opinion, too, among banker | to the effect that the peak of tn credit stringency has probably beel reached and perhaps passed and tha further aggravation of the condition during the summer is not be looke for.
 This is a state of things whicl I dS tN ir,nv n the investment market, notwithstand
 ing that prevailing high rates an
 other obstacles naturally tend t
 make the prospects somewhat unfa vorable to the successful placing c securities at reasonable figures. Purchase of Foreign Securities.
 The return of American securitie
 to this country and their absorptio in our market is still evidently pro
 ceeding. although at a somewha
 slackened pace due to the fact tha
 the quantity held abroad and avail
 able for shipment has been so largel reduced. On the other hand, diff c cu1tfes in the investment field her
 and attractive openings abroad hay tended to make American capits flow steadily into Germany and Aux
 tria.
 I Reliable foreign reports point t
 the fact that there is little if an
 check to the purchase of Germa
 marks, bonds, stocks and even land
 and some very high estimates ar
 placed upon the amount of GU
 capital which has thus been transfer
 red. The latest interesting develop
 ment is the action of the firm (
 Kuhn. Loeb 6 Go. and the Guarant
 Trust Company in assuming an in
 portant position in the Credit Ansta
 of Vienna with an investment (
 about 4o, ,0o0,o0 crowns and the rigf
 to appoint directors. This intere'
 in foreign enterprise is in some re
 spects wholesome and desiraao
 one in connection with the securtn
 of our international position, a ! though it of course tends to linn
 the activity of our investment mark
 here. What we are doing in tn
 direction has produced its effect in
 much more nearly stabilized. cond
 ton of exchange, both sterlin
 francs, lire and marks showing du
 ing the past week decidedly less di
 position to fluetuate violently, a
 though on one or two days there Wi
 weakness fn lire which was on
 partly offset.