Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-08-28
CREDIT SITUATION
DOMINANT FACTOR
Public Still Holding AIoof, Hav.
ing Little Faith in Bullish
Demonstrations

New York. Aug. 2S.-The Evening
Suns weekly financial review today
says:
There was little in the current week
to indicate which way the market fol
securities might jump or whether II
would jump at aff. 1t was in truth
another period reflective of inconclu
sive sentiment and veering opinion fol
which scant anchorage was to be found
in developments of positive char
acter. There was something Of tend
ency in money rates to harden II the
quotations in the call loan market may
be taken to mean anything with re.
spect to more than monetary conditions
The government withdrew $4,000, ,00C
in deposits from the New York banks
on Thursday. and on that day. just
before the stock market closed. call rates
advanced first to 8 per cent and then
to q per cent. Yesterday they went as
high as 10 per cent, renewals being
made at s per cent, It is doubtful ii
these rates meakt anything more than
that some belated borrowers were caught
unawares. The ruling figure for de :
mand accommodation through the week
was per cent. Time funds held around
9 per cent. and at intervals it seemed
that renewals were rather more readily
granted than has recently been the case.
That there should be some hardening
at this time is neither surprising nor
disheatening. since II Is wholly seasonal
Obligations falling due in September are
usually fairly heavy and in addition there
are the Treasury certificates to be paid
off in September. amounting to some
500 ,0O0. 900. and the federal tax pay
ments Of the third installment to be
met. These things, however. have long
entered into the calculations Of the
Street. Back of these requirements there
are actively in the making the prepare
tions for crop financing which appears
not to call for the usual girding of bank
inE loins since consciousness of the
widespread credit, strain has caused hor-
rowers on that score to begin their
preparations for accommodation earlier
than has been the case in most former
years. However that may be, the real
test has not come yet, and will not
come before the middle of the next
month,
The outlook seems not particularly
promising for relaxation in the credit
situation through the remainder of the
year. 1t was difficult to trace any
change in attitude in this connection in
banking circles. Liquidation in COM
modify prices has helped some and in the
opinion of the Federal Reserve Board
expressed in its July bulletin, credit in
flation mas about reached the maximum
and by this token may be expected to
recede from this time. "The pro-
nounced checking of speculation, y
stated the board. "and the restriction
of operations IN securities and stocks to
very low level has been a decisive
element in the financial centers. par
ticularly in New York. Coupled with
these conditions has come. according to
general agreement. a definite if slight
increase in general efficiency and an
equally positive. though limited. cur
tailment of extravagant expenditure and
unnecessary borrowing. These factors.
IL maintained, are an influence in the
general business and credit situation
will mark the turn from the period OF
peak initiation to n period of restora
| ton of sounder conditions.
"This is very interesting and the
source of high authority. but the i'm
provement cited has not vet become
convincing enough to vispniize it in a
distinct way before q public which has
gone through rather gruelling expert
ence in past months of disappointment
and weary waiting. The public still
holds aloof from the stock market be,
cause it cannot be proved to its salts
| faction that a real live earnest move
ment in values, once started by any
development capable of starting it, will
have banking support; that is to say
will the necessary credit be forthcom
ing to make such a movement possible