The Bridgeport times and evening farmer., 1920-02-07
HENRY CLEWS'
 WEEKLY LETTER

Another week of postponement or Inactivity in national and information al affairs has left the financial out look but little altered. Conditions abroad can, apparently, not be fully adjusted to a peace basis without the aid and participation of the United States. This situation naturally gives to policies at Washington and to opinion throughout this country gen. orally a. significance they would not otherwise be expected to possess.
 From this point of view the unsat- isfactory progress of the peace treaty negotiations among the various Sena- torial factions has been especially disappointing. The same is true of the apparent inability to arrive at an un- derstanding regarding railroad and other pending legislation. It looks more and more as if some topics which should be disposed of at an early date might be carried over into the political campaign instead of be- ing promptly adjusted as they should be.
 Distinct signs of economic improve ment in some of the chief European countries are the most important item of encourage nent in the pros pect, although these are partially off
 
 for relief in the Central Empires and in various devastated regions adja- cent thereto.
 Money, Credit and Investment.
 Although the level of operations on the New York Stock Exchange has continued low, call money has again tended toward high levels touching IA per cent. or more during the middle of the week. The action of the Chicago conference of bankers on January 23, confirmed the action already taken by the New York Clearing House in fixing a low uni form rate of interest upon out-of- town bank deposits.
 This practically leaves to the Fed eral Reserve Board the power it has desired in the making of actual rates of discount. By refraining from com petition for interior funds the city banks of the country are doing what they can in a negative way to make the rates named by the Board 'ef- fectiKe.'' As yet there has been but little genuine basis for judgment re- garding the operation of the new rates on the basis first announced in New York and other Eastern districts week ago.
 The new level of rates has been adopted practically throughout the | country and constitutes a much more 1 expensive basis for borrowing than l any thus far established. Heavy local l demands for funds in the interior 1 have made the return flow of money to New York and other cen | ters usually expected at this time ot | year far lighter than usual, while 1 the January liquidation" or rein vestment of funds paid out in divi- dends and interest has been of us 1 ually limited character.
 The Federal Reserve Board evi dentIy has the support of the bank, ing community in its contraction policy, while the appointment of Sec retary of Agriculture Houston to tn. Treasury portfolio is likely tt strengthen those who have favored ; strict control of rates of interest, MT Houston being regarded as a decide, contractioniSt.
 From all standpoints, it must b. admitted that prospects favor no
 only a continuance of high charge
 for money but also a maintenance O
 those conditions which produce thes . rates. Prices of commodities ar steadily tending higher while the eff fort to limit or reduce the volume O
 bank loans has thus far been unsuc cessfuI
 That still higher rates of redis
 count may be resorted to at an earl! date should the present level no produce the desired result is c1earl, a possibility. The reflection of thes high discount rates in lower cap
 italized values for securities as well a
 in the necessity of higher rate of
 ferings on new securities must be ex l " 0sed.
 Foreign Trade and Exchange,
 The year-end trade figures for 1919
 just made available, show that ou
 favorable balance was a good dea . over S4,O0o, o,000,000. December op
 erations showed some slackening i,
 the scope of the business, and un
 official indications for January poin
 to still further reductions.