Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-01-29
OUTLOOK IN TRADE
MORE EENCOUR RAGING
Situation Losing Power to Dis.
turb Sentiment and En-
feeble Initiative
PROBLEMS STILL TO BE MET

New York. Jan. 2O.--The financ,o,
outlook is presented in the herald To-.
dav ns follows:
Extreme dullness in the securities
markets. n broad advance in British
exchange md the lapse Of positively
ensicr tendency in money conditions
featured the current week in Wall
street At the same time. a more con-.
fident feeling with respect to the bus;.
ness and industrial outlook was mani.
fest. Through long. weary months Of
fami liarity with commercial and finan.
cial handicnps In this country. with thc
state OF near -impotencv in Eurono and
with the economic dislocation In Mo
world in general, the situation has ,ost
something OF it's power unduly 70 die.
turb sentiment and to cnfeeble initio.
tive. This change in the psychologico,
aspcct was noted in December. II hns
become more pronounced in January
and unless something very unspttlinr
should develop, there would seem 70
be every promise of its continued
growth hcnceforth. This NAV he sofi
to he the basis for the more optimistic
contemplation of the future even while
there IL no want Of recognition Of tho
difficulties still to be surmountcd. The
spirit behind the solution Of problems
has changed with the incoming of tho
new year.
Perhaps the most important influence
in directing cheerful forward look
was the meeting Of the supreme council
at Paris. At that meeting matters cf
German indemnity and reparatinn, with
all that such nm adjustment implies with
respect TO stabilizing world trade, were
to be disposed OF. That France and
, Germany had apparently come to some
| sort OF understanding was an imprcs-
! sion held in financial circles here, and
this was deemed highly constructive,
The effect was most directly reflected in
! the course of exchange values. Sight
drafts on London got as high as So. .SSIs
and In the middle Of the week the franc
advanced nearly to INC. Tho movement
was rapid and later in the week the In.
cvtablc setback came. although the re-
action was not extensive. The situa-
ton was an immediate spur to specu.
lativc activity. As Is usually the case
in speculation the movement was car.
ricd too far, yct behind it all was
| fundamental force which the prospect
of an immediate settlement Of the
economic provisions of the Versailles
| treaty could not alone create.
| The temporary stiffening of money
rates and the small volume of lOaniny
transactions neither bclied recent as.
scrtions Of easier money markets nor
disproved prophecies of retrograde
stringcncy in credit SO far this month
credit dclation has proceeded space.
In the first half Of January discounts
and loans were contracted in excess Of
half billion dollars. Between the
period Immediately preceding Christmas
Federal Reserve note circulation stood
at $3.404 .031 900. Four weeks later
that item was S3,115.31O. 900.
shrinkagc at the rate OF about S72,.
600. 600 week At the beginning Of
the fourth week of January, the ratio
of the Federal Reserve system was 49,
per cent. the highest in n long time.
| Taking the individual regional banks Of
the reserve system It was to be OBJ
served that the ratio advanced in the
| industrial CPntcrs and recedcd In the
agricultural ccntcrs. Industrial liquida.
tion has in truth outstrippcd collections
in agricultural regions. There has not
been the revolt on the part of labor
against wage reductions and hour cur.
tailmcnt that many anticipated. Pay
rolls have been very materially reduced
and the burden on the interior banks
correspondingly lightened. Funds have
been released for temporary loanng. At
the moment business in that field is not
brisk, but all the factors incidental 70
a gradual tightening Of banks burdens
are present.
1t IL, therefore, the slow dcAatIon Of
the American dollar which in the first
naysiS IL behind the better tone Of the
foreign exchanges. But builded on this
fundamental structure were numerous
other Developments such as the Belgian
loan for $40. 900 900 which in some
quarters was believed to have been
foated by Belgium to liquidatc q por.
tion Of her indebtedness to Great Brit.
ain. Although the projected French
'0an for 500. .OOO. 900 has for the time
being been abandoned, according to the
statement Of VI. Casenave, the director
general Of French financing here. there
was the same understanding that Great
Britain was to be relieved Of a part o.
her foreign financing load. Other loans
were freely discussed in the same CON
nection. In short It was presumed that
this country was in way to take over
some Of England's financing response
bilities, and Ii this should prove TO be
80 it was not surprising that sterling
should advance, and that predictions
that the advance w-1i,i continue until
the rate Is in the neighborhood Of s.,
should be made In conservative quar-
ters. Under prevailing conditions OF
world trade that level was regarded as
the logical point OF stabilization barring
unforeseen events.