Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1921-06-02

1HroBEs FROM East. ARE THAs
C0NDTxyONs sTRENCTHEN-
MIG ALL ALONG LIME

3F0B18 FROM East. ARE THAN
CONDTTION6 sTREN0THEN-
ING ALI ALONG LINE
Industrial stocks on the average
eank to slightly lower levels last
wsek, while railrosd securities
spurted slightly. The strength Of
ths latter was due largely to the Inn
4 Dfovsmsnt recorded in the April
statement Of earninss Of many Of
the roads. and also, TO reports that
wage cuts Of from 10 to IL per cent
n tho return to common labor would
b made.
Further price cutting Of automo-
biles. stern statements made by steel
magnates ct the institute Of iron
and steel meetings, and depression
IL the foreign exchanges were fac
tors that caused professional trad
err to cause the prices Of industrial
stocks further to shrink. The mar
ket, however. Was confined within
narrow limits. and responded princi-
rally to the rapidly fluctuating Views
Of professional traders.
liberty Bond Program
President Harding last week pre-
elpitated original thinking In the 4
nancisl markets regarding liberty
bond program. From . cabinet MEM
ber in Washington came an intima-
tion Of . groping for . tentative plan
TO retire liberties a. they matured by
selling to Investors the obligations to
The United States treasury Of the al
Hes. Bankers called the suggestion
- -idsal theorl&icsi solution. :" but
doabt has been. .exprsssBd ~ to the
praeticahility Of the plan.
Before any part Of the debt can
b tfansferred TO investors, the
treasury must work out with the al
iiss . funding plan. a. the oblisa-
tions are now in the nature Of float
Ing Indebtedness ON which IN 1920
Interest was deferred for three
years.
IN any plan that may be worked
ont, the Unitsd States treasury has :
moral obligation not to sponsor the
ss1s to an Americah investor Of any
farstsnssscurity IN whose high safe-
~ it q not confident To guarantee
British bonds. tor instance. would
snesheps be unnecessary, and might
4 Sgarded as an attempt to impair
y }sh financial prestige and credit.
3te Of the continental debtors nm
kSl2tunately have not the same stand
R31H % Britain, as the market value
Z kheir outstanding obligations re-
.ssxis.
ne calm Of a. foreign exchange
& krkst that had attained fair de-
Ss4ee OF stability in recent months
~ disturbed last WEEK when stsrl-
ing rates moved downward in sharp
declining movement, wiping ont .
substantial part OF the late recovery.
During the course Of the week the
sterling demand rate which had ris-
On above 81 to the pound ON the sus-
tained rally since the beginning Of
ths year broke more than ~ cents
net. The movement was naturally
associated with the first German
payment Of 100000. 900 on repara-
lions account, = trAnsaction which.
according to the common banking
view, involved the selling Of German
balances in London to provide dol
lars for meeting che amount paya-
BE in New York.
Assuming this to be the correct
explanation OF the severe setback
suffered by sterling rates. the mar
~ should rally quickly with the
lifting Of che pressure Of German
sslss. The other exchanges have also
yielded WIKI sterling. although not
in the same degree. The banking
view here Il that British finance Il
IN . sufficiently strong position to
warrant the belief that in the long
run the trend Of sterling rates will
ecntinus upward despite temporary
ootbacks from time to time.
Federal Reserve.
AZ the position Of the federal re-
ssfve system II steadily improved
from week to week as result Of
importations Of gold and reductions
Of rediscount operations. 1t becomes
increasingly apparent a. call money
rates hold firm. that the banks are
more intent upon paying off their in
debtsdness ct the central institutions
than supplying credit for use In the
stock market.
Al any rate this seems to - the
logical sxplanatioI for the present
situation at ths center The re-
serve position Of the local reserve
tapk ID the strongest in nearly three
year,. Indicating amuch easier situ-
alton al around. yet borrowers in
Ne call money market continue to
pay Mto Z per cent for accommo-
aation and Hast week paid a. high ~
IN. the peak rate since early In
February. whom per cent was quot
ID during temporary period Of
etringency.
Ths lstest statement Of the federal
1ssesys syStsm. consolidating the
! SoDorts Of the several banks. revsals
- snteraaflne fart that The urog-