Great Falls tribune., 1921-11-14
EASY MONEY IN SIGHT.

for a long time has set all the fl
nancial experts to talking about it.
The Wall Street Journal which
writes for experts on finance has
this to say about it:
"There is something much broad
er indicated than mere money
market fluctuation when the federal
reserve centers of New York and
Philadelphia reduce the discount
rate to AZ per cent in the first
week of November. Perhaps we
have not had such thing as a nor
NAL year for money during or since
the war. But a weakening money
market before the middle Of De-
cember is as abnormal as dear
money in the early part Of the year.
Each means condition Of funda-
mental Importance, if we remem-
Der the great movements OF money
and their seasonal influence.
'In a normal year money goes
out of New York to move the crops
and rates stiffen. When the crops
are moved and the peak Of the rail
road freight load is passed the
money comes back with a rush,
about the first or second week in
December. 1t is wanted for the
disbursements over the end of the
year. It is released early in Janu-
ary, and from that time money is
normally as cheap as it is likely to
be. At the end of 1906 the stock
market was at the peak of great
bull movement, industry was BOOM
ing, railroad gross and net earn
ings were a guaranty that prices
had not overrun values. The condi-
ton of prosperity continued during
the first half of 1907. But at the
beginning Of the year, when money
should have been cheap, it was very
tight. The condition was quite ab-
normal and may be- said to have
warned experts of the semi-panic
and the resort to clearinghouse
certificates later in the year.
But today we have the reverse
of that condition. Money is be-
coming cheaper when the normal
demand should be strong. Indus
try is not booming, railroad earn
ings show a surplus over operating
cost only by pinching maintenance
and ignoring betterments. But the
stock market, after long major
bear swing, is showing strength.
The investment demand for bonds
is remarkably good. AS in the be-
ginning of 1907, when bear mar
ket in stocks was the comment on
the prevailing prosperity, SO the
incipient bull market Of today
seems to be pointing to perma-
nent improvement next year.
Easy money is feature follow
ing readjustment after period of
great initiation. It by no means fol
lows that there is capital for ad-
venturous or even reckless enter
prise. It means that borrowers OF
high credit are scarce and that lend
ers are seeking that kind of bor-
rover only. But long period OF
easy money seems to be we'll in
sight. After the panic OF 1893 that
was the condition all over the
world. The Bank of England rate
in 1894 went to the irreducible min.
imum of two per cent, and remain
ed at that level for nearly two
years. The federal reserve discount
rate reduction will seem, in retro
spect, one of the most important
events of these times"
Of course easy money in New
York is a cheering thing to read
about out west even if it be true
that there is no sign Of it yet to
be discerned in these parts. Yet
it is true as every one knows that
easy money in the east will sooner
or later have reflex in the finan-
cial conditions prevailing in the
west. 1t may be a little aggravat-
ing to the Montana man who finds
it hard to pay his taxes to read that
money is plentiful and piling up in
the east, but if that be a fact some
of it will get to the west before
long. Money :, distributes itself
where it is most needed provided
the security is good and the interes,
return adequate. After a money
pinch like that we have been going
through for more than year now
the first sign of the return of goo6
times is surplus money in the in
vestment centers. It is therefore
not surprising to find more cheer
full and optimistic tone to the bust
ness reports which say that bust