The Bridgeport times and evening farmer., 1920-01-27
HENRY CLEWS'
 WEEKLY LETTER

EuEENLE kaGgaEEl
 Lack of new or positive develop ments has reduced the stock market during the past week to the lowest level of business reached for about a year, with daily transactions run ming only between 100000 and 500,- 00G shares. European nations are evil dently waiting for definite tndica- ton of the foreign policy of the Unit ed States, being influenced in this at- titude, doubtless, by repeated hopeful forecasts of early action on the peace treaty, with only moderate reserva- tions not likely to vftiate that docu- ment. Meanwhile, their urgent neces- sities have compelled a continuance of our heavy export movement of goods, with the resultant depressing effects upon foreign exchange quota tions.
 The situation at Washington has apparently included a deadlock not only on the peace treaty but also or market has feared for some time past and does not point to any new phase of the situation but merely to a failure to improve the situation all ready existing. Despite this stand still in the process of adjusting broad public questions, business has con tinued in a hopeful mood, with strong demand for goods and ample employ ment for labor the country over.
 The 'Pan-American Financial Con ference at Washington has shown that the nations of the Southern Continent are still looking to the United States as the source of their means for fi- nancing industry and trade and that our closer connections with them es- tahlished during the war have laid the foundation for a continued intI- macy in commerce and banking.
 Money Situation.
 Call money loans during the week have been obtainable on fairly req sonable terms, although time con- tracts are still practically nil In spite of this fact, there has been comparatively little fresh demand for funds, it being a prevailing view that any marked activity or sharp ad- vance in values would bring about an increase in rates or a. shortening of the line of accommodations or both.
 The Bankers Conference, called for Chicago on the 23d of the month, has
 
 the action of the New York Clearing terest on bank deposits at IA per cent. as maximum was apparently taken in anticipation of what might be decided at Chicago.
 Frequent rumors concerning pros- pectfve advances in the rediscount rate of the Federal reserve system were verified late on January 22, when announcement was made of a new rate schedule which places com mercia1 paper at per cent, fixing customers advances collateralled by Government bonds at 1-2 per cent
 The effect of this change-the most considerable advance in discount rates ordered at any one time thus far-may be greater In restricting the supply of funds available for the carrying of commodities than in limiting the lending power of the banks which are in the call market. Some time, however, will be neces- sary in order to trace the exact eff fleets of the new rate sche eduIe in their relation to securities prices, es- pecially as much will depend upon the way in which the policy is ap- piled in connection with what is called the ''rationing of credit" It is the uncertainty with respect to what was to be done, followed by the pres ent lack of positivenesss regarding the future effects of the discount ad- vances, which more than anything else has kept investors and traders from pursuing a more vigorous policy.
 The slight character of the i'm y1~0 nv1& iT1 fI.o ek the Federal Reserve banks shows that curtailment of loans on securt ties has only very moderately altered the banking position and suggests that genuine relief will not be ob- tained through discrimination against the stock market, but will come from curtailment of lending power toe freely used in other directions, as fol example in connection with the hoarding of commodities of many different kinds which, as is wei known are now being carried or bank credit. A clearer definition o1 policy on these matters is urgentl, called for.
 Railroads and IndustriaIs. While most of the shrinkage O. prices that has occurred during tn. past few days has been seen in { comparatively limited list of indus trial shares, there has been tend ency during recent days to give nor | attention to railway issues. At time l a distinct upward tendency, althougl | of very narrow range, has been ob 1 servable. The news made public il l the middle of the week that a dead 1 lock had occurred between railroas 1 conferees at Washington was regard ] ed by some as a dfscouraging facto | in the situation, but on closer apalys- | proved to be in no way a novel de
 velopnent, the points at issue bein 1 chiefly those already recognized a
 matters of unavoidable difference 0 l opinion.
 l The labor issue has all along bee l regarded as one which could not ' | settled without further cont CTS | on the floor of Congress On tn | other hand. adjustment of the rai1roa securities situation and determinatio 1 of the level of income to be receive
 has proved a matter of doubt anon ouners of railroad securities an transporation executives. Tl.is las un iNl