The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-01-02
MONEY REVIEW
OF YEAR 1919
QUIET PREVAILS AT END OF
WHAT PROVED TO BE A RE-
MARKABLE YEA R-1920 OUT
LOOK is HOPEFUL.

LOOK is HOPEFUL.
New York, Jan. The annual re-
view of the financial world, given by
Henry Clews. says in part:
quiet condition in the market
prevailed at the close of what has I'M
doubtedly been a remarkable year
During 1919 we have seen the elimina
ton of government control of money
rates and of operations in securities,
the revival of active trading and in
vestment dealings, the removal of the
artificial support of sterling, and as
a result of subsequent decline both
in British and other currencies to an
unprecedently low level. The volume
of business on the stock exchange has
attained almost record proportions
while the issue of new securities in
the United States has in recent
months surpassed all former levels of
the kind. Many new shares have been
admitted to the exchange, and trad
ing has attained a breadth and activ-
ity which could not have been expect
ed at the opening of the year. The
increase of activity on the stock eX-
change and in the securities markets
generally has been the more mark
ed because of the fact that during the
war investment and speculation have
been so sharply repressed, the saving
and investing power of the commun-
ity being diverted into the channels
of public credit Removal of restric-
lions enabled many who had long
been prevented from the free use of
their funds to apply them in the di-
rections which they considered most
promising.
Development of Business.
Several distinct stages have been
included in the year 1919. The first
of these covered the post-armistice
iperiod. practically extending from the
/ opening of the year to about the con-
clusion of the fifth Liberty or Vic
i tory loan in April. This roughly cor
! responds also with that within which
was restrictions on the issue of Sc
! curities and the lending of money
on cali were still maintained. 1t will
| be remembered that comparatively
early in the year the so-called capt.
i tai issues committee was allowed to
suspend operations, while not very
/ long thereafter the So called money
/ pool committee, which had held stock
I exchange operations in check, was
| also dissolved. a second period then
opened and extended practically up to
the latter part of June, at which time
the opening of a speculative era led
warnings against a possible OVERRIDING
of such operations. During the sum
mer, speculation reached an excited
pitch, with prices and volume of oper-
atoms on extremely high plane.
Throughout all this period interest
/ and discount rates suffered but lit
) tie change, the federal reserve sys-
tenn being unable to advance them
because Of the unfavorable effect
which would thereby be produced on
government financing. This third
period came to a close practically at
the beginning of November when
climax the federal reserve board adj
vancing the rates Of discount at fed
eraI reserve banks in speculative
transactions. A fourth and final period
has carried the market through the
months of November and December
and seems likely to continue some
time longer. It's characteristics have
been shrinkage of prices, limitation of
volume of business and high rates for
the use of call funds.
Outlook for 1920.
Facing the year 1920. the United
States stands as the only free gold
market in the world, and by far the
greatest holder of gold in the world
as the only important market for capi-
tai on a large scale and as the most
extensive source of raw materials as
we'll as of manufacturers now in ex-
istence Its labor is fully employed
and its productive energies have more
than an ample field for their applica-
ton. This inevitably means a con-
tinuance Of strong and active bust
ness development. The shortage of
immediate loan funds, the tightness of
money and the effort to contract credit
are elements in the policy of main
tanning stability and solYency. and
they may be expected to continue Tt
cannot, however, dissociate itself from
European conditions In Europe eco
nomic disorganization has not been
overcome and requires our aid for its
immediate relief. The outlook for 1920,
given due business caution, is hope
full; but the difficulties TO be overcome
are great and the necessity for self
control in the use of credit is more
marked than for long time past.
However. as the year draws to a close
a distinctly more cheerful feeling is
discernible in the Wall-st. district:
this is evidenced by the increased
demand for the standard shares on
the belief that the market viii be en-
titled to the customary January rise.