The Bridgeport times and evening farmer., 1920-02-23
CLEWS'
 WEEKLY LETTER


 Although a new trend has beer given to the foreign relations of the United States and to the European situation generally during the past week by developments at Washington, the significance of this situation is as yet largely political and has not been fully reflected in business conditions thus far. The Presidents unexpected dismissal of the Secretary of State, coupled with his interpretation in the Adriatic problem, have far-reaching implications which may yet possess a direct bearing on the stock market. Up to date, however, they are re- garded by the market, apparently, as merely tending to put off the peace adjustment which has been so anxi- ousiy awaited as the only means for creating a Gtable basis for our foreign commerce. As a matter of fact, the new developments in foreign rela- tions strongly suggest the use of the treaty as a make weight in diplo- macy and, consequently, it's further postponement- view which is some what borne out by what has become known of the political maneuvering in the Senate.
 r Regardless of the political situation the market has experienced a more encouraging condition, showing an up- ward tendency in prices in many is sues as well as an ability to get away from the excessively high rates for money which had been characteristic of the week preceding. This is partly due to the fact that liquidation had gone to. so advanced a point as to T a bargain character and hence to rally to their support strong invest ment buying which had previously been lacking. An interesting and en- couraging factor in the situation has been the improvement in the prices of high grade bonds. particularly rail- road issues, which has occurred dur ing the past day or two. A good deal of buying has been developed in the interior of the country and, while market. operations have been on a relatively restricted scale, the situa- ton has certainly been more promis- ing. Call money has ruled around 6 per cent during the most of the week, 1 and were it not for the high rates on 1 time funds as well as the scarcity of accommodation of this class, the I money prospect would have been 1 reckoned decidedly more favorable. 1 However, the reduction of the Federal Reserve ratio to only about A per | cent at the beginning of the week | was taken by operators as a very dis i couraging symptom, they being as
 sured by their bankers that the con- tinued decline of the reserve percent age necessarily means a tightening of
 credit at the reserve banks and, ac-
 
 of funds which they can consider available for investment purposes i There has certainly been a very de- i cided curtailm ent of bank credit in New York and the districts adjacent ] thereto, but much of what has been saved there has been offset by cor responding expansion in other parts i of the country The resumption o1 gold exports to South America upon
 a large scale during the past few days
 also gives promise of a reduction 1T
 the gross amount of reserve at reserve banks, which is likely to be reflected in a. corresponding falling off of the ratio of reserves to liabilities even i the present high discount rates should
 be effective in curtailing the loan ac' count in the way that is expected O.
 them It will be some time befort
 the outlook in the reserve system cal l clear itself very materially and unu that period arrives banks are hket to continue chary about committln; themselves on time contracts, so tha the call market, even when rates ar favorable, will be more Or less un stable.
 The appearance of the railroad bi from the Conference Committee O. Wednesday last was welcome deVei opment, inasmuch as the long d.
 had led many to doubt wheth tn . committee would actually suc "eed i getting through it's work before tn l date set for the return of the road: The time remaining for discussio
 and action in both Houses of Congr es is small but it is not too short t permit of legislation unless there