The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-01
FINANCIAL NEWS
AND COMMENT
Chances of Spirited Responses
to Election Results by
Security Markets.
CREDIT STRAIN LESSENED
Continuing Demand for 8 Per
Cent. Investments Is Strik-
ing Feature.
CREDIT STRAIN LESSENED
by WILLIAM JusTus BoIEs.

With the passing OF the election tbs
investment, situation will be relieved OF
one OF the uncertainties which often
loom large In a Presidential year Al
though the American people have
evinced less interest in the election than
usu al, Europe was never more concerned
about Presid antial contest In this coun
try. because she realizes this nation
must take an important part in restor
.ng business abroad and financing the
world back 10 peaceful pursuits.
Many foreign governments and mu
inequalities are striving still to borrow
here. and the probability is that on :
total investments in the securities OF
other nations VIII pass the $4,000. 000.-.
coo mark early In 1921, which would
break all records and with the $4,000,
coo, 900 owed us by allied governments
would give US a total claim on other
nations equal to half our national debt.
Inasmuch as the United States Treas
ury will have to provide for taking u ,
s2.347. 100000 floating Indebtedness
within the next twelve months. the
problem OF readjust,ng the war debts
OF all governments will continue an
important factor IN the money market
next year.
Absorbing Per Cent. Loans.
Successful flotation Of other impor-
tent loans last week reflected continued
absorption of good securities by pub
tic that has developed a keen demand
for bonds and notes paying double the
dividend return allowed by savings
banks. Oversubscriptions of late have
been so large as to suggest possible re-
ducton in the interest rate, although
heavy financing which remains to be
he tNar
attempting TO place n foreign loan on
lcwer interest basis.
Sales of short term notes by indus
trial companies represent capitalizng OF
! floating Indebtedness, thus placing with
the investing public burden formerly
carried by banks. AS banks of large
cities are heavy holders OF merchan-
disc, that financing will be effective
/ in releasing an immense volume of
credit which can be used to good adj
vantage in caring for everyday business
demands
With a reserve ratio OF scarcely q
per cent above the prescribed limit. the
Federal Reserve system ought not 10
be burdened with the rediscounting OF
paper which can be refunded into long
term securities. The banks are loaded
heavily with such loans and to the extent
that the burden can be shifted to per-
be relieved and the bank position
strengthened.
The Next Eight Weeks.
The banks enter to-day a period of
the year usually marked by great money
market activity. The pressure this iall
has been extraordinary. owing to disloca-
ton OF foreign exchanges. heavy Gov
eminent borrowings unprecedented Tor
oign financing and immense advances to
banks in crop districts. The situation
ms been made more difficult by compli-
cations growing out OF freight conges-
ton Through the reaction in commod-
ty prices, now In full swing, carrying
! G. arres are not as great as they were
! a d banks are much better prepared to
meet year end settlement demands.
| rhe country's bank position Is essen
italy sound and considering the unparal-
Iced demands made on them CONNER
cial banks have come through the ordeal
surprisingly well.
Developments OF the last few days
| show that the strain Is ret as intense
! as IL was and that foreign governments
| and corporations Of high credit can
| finance their requirements by selling z
and per cent. securities. The invest
! inc public a few months ago was not
! willing to employ its funds al even those
terms, because commence was lacking
and thousands of investors let savings
accumulate in banks. Sentiment changed,
however, with the publication of the
crop forecasts and the paying off of the
Anglo French loan. Investors since then
have reentered the investment market
with immense orders from large and
small buyers. and consequently Novem-
Der will open with the best bond market
that Wall Street has had for many
| years.
I No Election Scare.