The Bridgeport times and evening farmer., 1920-02-17
HENRY CLEWS'
 WEEKLY LETTER

Signs of activity in Congress with respect to some definite action on the of railroad legislation have been the significant clements of public policy bearing upon the stock and invest ment market during the past week. Abroad the disposition now clearly made evident, on the part of Great Britain and her Allies, to accept the IT 0 odiications of the treaty which may be necessary in order to put ii through Congress have removed the fears which had been entertained ia some quarters to the effect that there might be long delay and perhaps hiction in Europe even after our Senate had disposed Of the document The in ereasing embarrassment in some of the European countries, due to lack of resources, for the restoration of industry, has emphasized the neces- sity of early actions but at the same time has made it moro than ever ap- parent that there has already been a loss of invaluable time and of trade opportunities which may never recur-
 The indications are already clear 
 aided by the decline in foreign ex- change, are succeeding in taking to themselves a large share of business which we had regarded ss our own There has therefore been no ddminu- ton in the need for a better definition Of our foreign policy Perhaps the collapse of exchange rates has fur nished a stimulus without which the settlement of OUT foreign relations might have been allowed to drift still longer
 Banking Conditions Still Difficult
 The fact that the reserve ratio of the Federal Reserve Sygte m made public at the beginning of th.s week indicate a further decline of Al per cent has created a discouraEtng i'm precision in financial circles because | of the feeling that this reduction | shows the compaS' alive unsuccess ot ! the high rediscount rate policy an6 l therefore points to a possibility o1 1 still further advance in rates Thai l is not altogether true, however, a: | tho decline of the reserve ratio i: l partly ascrIbab1e to the continuing i losses of gold from which this coun.
 try has suffered for some time pas and which have now brought the gold ! bG lIlG \ SGSTd1 FS0S01 W l System down to less than $2,00o, ] 0OO,e0O. There has been a loss o some 20 per cent from the 1ttgh poin of gold hoard dings reached during tn ] war. 1t is in large degree the out ] come of the fact that we have con tinued to buy heavily from the Orien | and from Sorth America notwit1l
 standing that they have transferre' their purchases in some 1neasur ,i away from us, and hence have beer
 able to draw on us for payment f gold This condition points to tn l. need of a stronger foreign exchans , policy but does not necessarily mea; further advances in discount rates, al though these may yet be forced shoul
 the liquidation of the non-nquid pa
 per of the banks not proceed a
 rapidly as banking authorities desirt Meanwhile the past week has see
 a very decided easing of money rate: = but high figures for time none |. coupled with scarcity in this kranc , of the market and difficulty in maI ing satisfactory banking arrangt ments for an adequate time to perm the financing; of transactions requi
 ing 8 fairly long period have offs . the good effect of the decline in ca
 1 money.
 There is in fact no definite pro
 pect of any early improvement
 money conditions generally as o shown by what we have just said e the Federal Reserve situation ar - outlook. Nevertheless. some observe
 1 believe that the "corner has be- - turned" and that there will be a steady if, perhaps slow, irnproyene e in conditions from noSy on during t1 0 late winter and spring months, l. E'ofefgn Exchange Collapse. . The collapse of last week in r. d eign exchange has been, as sof1r Il predicted, partially oyercon7a, b > many branches of the market nc 0 seem little more than able to ho r, their own.
 ] Sterling during the week went
 higher levels. reaching a figure