The Washington times., 1922-07-02
Weekly Financial Reuie.U
BY HENRY CLEWs,
of Henry Clews & Co., New York Bankers.

ports concerning the prospects Of
cotton are even more hopeful than
had been expected a week or two
ago. The reports from the North
west as regards grain also indicate
the probability of an even. better
production than had been forecast.
In these circumstances the mainten-
ance Of existing prices for cotton and
wheat promises a very substantial
return to the farmer. This outlook
isy being already reflected in q de-
cided Improvement of wholesale
trade, which has grown stronger In
the agricultural regions particularly.
while those branches of retail trade
which furnish sonsumable goods
directly to the user are also espe-
cially strong in the farming districts.
Only in these lines where seasonal
reaction Is always expected at this
time of the year has there been any
sign Of recession. The crop situa.
ton has undoubtedly tended to
strengthen the railroad shares, and
is creating a favorable basis for bus.
mess in all lines. Foreign bills rep.
resenting the early movement of
this, years products are coming into
the New York market and a good ex-
port movement appears to be ex-
pected.
Banking Situation Better Than Ever.
While the accumulation Of gold in
the reserve banks, and the strength
Of their reserve ratio are familiar
phenomena (this weeks reports
showing a minor decrease in ratio
to 77.5 per cent? the more important
facts regarding the banking situa.
ton have been somewhat overlooked.
One feature among these is the In.
creasing activity of bank deposits
as shown by the debit figures pub
lished by the Federal Reserve Board
which indicate a more extensive use
of bank credit than for a good while
past.
Such greater activity Of deposi,
credits always precedes a growth OF
borrowing demand. coincident with
price advances, and for such increase
the interior banks are now getting
into very much more favorable
condition than heretofore. The,
are now rapidly liquidating the frozen
loans held over from last year, and
with good success on the new cror
should be able to clear up their port
folios very thoroughly. Meantime
the spare funds of country bank,
! have furnished an ample basis for al
reasonable demands for investment
borrowing.
Market Review and Outlook.
With isssened activity during the
! past week, all around. the stock
market has shown the usual preholI
day dullness. During the early par,
Of the week speculative interest wa,
largely concentrated upon Mexicar
Petroleum and its allied shares, bu,
events have largely reduced tho at
tention even to these issues, No
very much interest has beon taker
In the general list, even the fiool
traders being disposed to look on fol
| the time being rather than to max,
new commitments, while tho genera
public has been inclined to take III
cue from the professional element
This has resulted in q relativel,
| light demand, and some reactionl
here and three, although with a gooC
undertone and apparent ability Il
absorb offerings as they appear
Notwithstanding the promineno,
given to tho strike talk, railway
stocks continue to be- the marke
favorites, based on the belief thai
the improved earning power of tn,
companies will, in a number o
instances, soon warrant more liberia
| distributions to their shareholders.