New-York tribune., 1920-02-23


and who will 70 down In history az
the man who discovered moro high
records in banking statistics than
any other Comptroller the country
ever had, announces that capital IN
creases granted to national banks in
January were the largest ever re-
corded in any month. This will be
especially gratifying news to busi-
ness men and security holders, in
cluding those who bought Liberty
bonds until 1t hurt. It Is nice to
know that tho banks have more cap
ital, even If you have to pay very
high interest rates for the use Of It.
Industrial stocks last week recov-
cred somc Of tho ground lost In tho
recent break. The improvement was
based chiefly on conditions within
the market rather than on any ma
terial Improvement in tho general
situation and outlook. The decline,
which ca1no to an end a week ago
Friday, left the market In a tenn
porarily oversold condition, and
since the liquidation had been COM
pleted for the time being tho ton
dency Of prices naturally was up
ward. Thus far, however, there has
been nothing more than a sharp
rally such as was generally looked
for. Of course, the advance may
continue, but it is the consensus Of
opinion among bankers and others
who study markets that q period Of
relative dullness lies Immediately
ahead, at least as far as industrial
stocks are concerned. 1t is believed
that the market will move up and
down within a comparatively narrow
range until a clearer view OF the out
look for business can be obtained.
The market has been discounting q
possible depression in business. Now
1t may wait to SEQ whether or not
the depression is going to come.
For the first time in some weeks
the banks last week made small time
loans to brokers. The amounts
placed were insignificant as COM
pared with brokers' needs, but some
Of them found cheer in the fact
that the banks had relented and
were inclined to believe that easier
money conditions might be expected.
There is not much prospect of real
ease, however. AS long as specula-
tion keeps within moderate limits,
plenty of call money may be expected
at fairly low rates. But any con-
siderable expansion in the specula-
tive position would almost surely be
followed by another money squeeze.
1t will be interesting to see how far
the boom in railroad stocks, if it
continues, can go before the clamps
are put on.
The results of the attempt of the
Federal Reserve Board to reduce
commercial loans have been meager;
indeed, there has been expansion
rather than contraction. Therefore,
since the board apparently is inf1ex-
ible in it's determination to cause de-
flation, it would be natural to expect
another increase in rediscount rates
in the not distant future. Such an
increase is widely expected in the
financial district.
The imitation of prices, produced
by enormous expansion in the vol
ume of money and credit, has made
gold mining an improbable bust
ness in a good many cases, and at
the same time has caused a large
increase in the consumption of the
metal in manufactures. Consequent
ly the deflation, which must inevi-
tably occur sooner or later, will re-
duce the consumption of gold in the
industrial arts and make it's produc-
tion profitable. For that reason the
statistics cited by the American
Mining Congress, showing that pro-
duction of gold in this country last
year fell short Of meeting industrial
requirements by s21, 300, are not
so disturbing as they otherwise
would be. One way to keep prices
high Is to put a premium on gold
mining.
British Manufacturers
Plan Drive for us. Trade
Purchasing Offices Here Are