The Bridgeport times and evening farmer., 1920-01-14
HENRY CLEWS'
 WEEKLY LETTER

has been a period of uncertainty ana of conflict in developments. Ma uonally speaking, the outlook has changed but little. The negotiations regarding the peace treaty are plainly .langing fire, conflicting factions not -laving succeeded in adjusting their differences as early as they had been expected to do. The preparations for railroad legislation also have been moving slowly, and the best observers are of the opinion that the process of harmonizing the Esch and Cum
 mins bills will take longer than had been thought. It is generally ad- mitted that if a satisfactory railroad measure could be adopted it would improve the position of railroad shares and securities in a material degree, while the reflex influence of such action would be very helpful in other branches of the market. The postponement of any such arrange ment taken in conjunction with the delay on the peace treaty leaves the market outlook still to be determined. From the foreign standpoint, pro- Sress toward the practical applica- tion of the peace treaty is apparent ly satisfactory and the movement of our trade with European countries has on the whole been encouraging. The settling down of labor unrest and a dininution of strikes during the past thirty days is one of the most hopeful elements in the general busi- ness situation. Taken with the stronger attitude of the Government toward socialistic and anarchistic ag1- tation, it gives promise of a much better industrial outlook than had been thought likely 10 exist at this time.
 Money Situation Significant.
 As expected the rates for money, as applied to call loans, have eased considerably since the first of the year but time contracts are still prac- tically unobtainab1e with few loans being made and only at excessive rates. The money situation there fore is still one to be reckoned with.
 According to the Reserve system statement for the week ending Janu- ary 8, the percentage of reserve to outstanding liabilities was 4s.7 for the system a whole while for the Federal Reserve Bank of New York it was 3S.5. These are respectively the lowest levels thus far recorded and represent 8 situation in which the free or "available' lending power of the system Is practically exhausted. It is true that the New
 York clearing house banks have shown improvement due directly to the return of funds from January dis 1 purse .nents of interest and dividends which were redeposited in the banks
 but until the parent system presents a stronger front one should not be 1ulled into the belief that rates are to remain permanently down. Indeed the bankers conference that occurred in Washington on January was productive of positive statements from the authorities of the Fedora Reserve system forecasting a further increase of rates of discount and a policy of curtailment of "unessential loans." With reserve percentages as they are and with the attitude of the banking authorities what it is, 1t is obvious that present loaning rates are merely the result of slackened demand for accomn odation. There Is no prospect at this time therefore for. any great change in money con- ditions, but the contraction policy
 which has been evidently decided upon should gradually result in re- leasing funds for sound undertakings and should prevent any undue devel- opment of very high rates for the
 use of money in the immediate fu- ture.
 Railroad Outlook.
 1 With the reopening of Congress on
 January 5, the railroad outlook has 1 again assumed a position of primary l importance. Perhaps the least hope ! full phase of the present situation in ! this regard is the fact that some dis 1 agreement has evidently developed in
 the Association of Railroad Execu- | tfves with respect particularly to the i rate of return which is apparently 1 contemplated in section of the ! Cummins bill. In that section the l effort is made to provide a standard
 rate of return for railroad invest ments. It has been the view of
 many careful thinkers on the subject 1 for some time past that the provision there contemplated was inadequate and would need to be revised upward | if the measure was really to fulfill it's
 objects. This situation and the evil | dently slow progress which is being made on details means postponement | of the enactment probably up to a tdate very close to the time at which return of the roads to their owners
 has been promised by the President It should mean, however, that cor l responding care in working out the
 details will be used. Meantime the
 railroad shares have shown but little
 disposition to move hecisiveIy in any
 direction except for isolated issue. u which advanced or declined slightly
 for reasons peculiar to themselves
 The local traction situation in New
 York city has apparently showr
 some signs of improvement due to the
 strong stand lately taken by tn,
 managers of the companies in behal of higher rates of fare notwith standing the assumption of a publi, ownership position by Governor Smith. Traction values have ac cordingly ruled stronger, particular, for bonds.
 Business Situation.
 Industrfally speaking the bushes situation at the opening of the new year appears to be more than en couraging. Not only are many fac tories booked ahead for long period | but the basic industries of the nation SIlch as those eu9aged in prOducin,