Evening star., 1922-04-23
THE SUNDAY STAR WASHINGTON D. c. APRIL %. sa2-PART
ny 1. A. FLEMING.

BY 1. A. FLEMING.
The one fact that cannot be over
looked at this time Is the abundance
Of money and the prevailing low
rates At which 1t II lending In the
open market.
Coupled with these facts il q Srow-
Ing belief that even lower rates are
Q probability before the demand from
business for credit accommodation
will be suficiently urgent to absorb
Looking over the stock market, one
can readily see overextended lines
OF speculation here and there and one
may anticipate more or less serious
reactionary declines. During the
past week the market has shivered
twice or thrice, but the reaction did
not 20 far: the bull element today IL
not easily shaken out, SO firmly are
they intrenched in some OF the lead
Ing stocks. =
A little shake-out finds the subse-
quent rally even displaying better
power than before the break.
Since the 18th Of June a year ago
stocks have been continually dis
counting 1922 happenings" But
when anything actually happens in
the market or incident to any stock
on the list to give 1t firmer ap-
pearance the good news is immedt-
ately discounted further-giving an
other helpful push.
In the bond market it is different.
Bonds have been setting the pace
rather than following, and 1t is ad-
mitted that bonds are more than like
ly to continue seeking higher levels.
just as long as the great amount OF
low-rate money is seeking invest
ments.
Every possible indication is still
favorable for cheap money and. by
the same reasoning, favorable for a
good bond market at advancing rates.
We find certificates of Indebtedness
selling In the open market at 3.04 to
3.4l per cent rates.
The most potent argument in favor
OF lower rates was furnished by
Secretary Mellon. when he turned
down an offer of s152.000.000 over
subscription to the 3h per cent six
month Treasury certificates recently
offered.
Bankers can give no other reason
for this action than 10 found in the
suggestion that she probably antici-
pates cheaper money" and therein
lies the excuse of those who look for
lower rates in public offerings OF
Treasury certificates in the relative
ly near future.
Just what effect to $40 per cent
Offering of certificates would have on
the bond market may readily be
imagined from the effect of the 3h
per cent issues.
Since March the total loans of the
country have been reduced by. $780,
amount representing commercial
loans.
Coming at this time, when industry
and business is supposed to be speed
ing up. It is remarkable that loans
are going the other way.
The Federal Reserve system Is not
carrying the bank loans to any great
extent at this time. 1t has but $780,
100000 bills discounted as against
$2.21s.20S.000 earning assets at this
time last year, and its resources are
nearly $500. 100000 less.
Bank acceptances are being traded
In on aka3 2-s basis.
Banks have been in the market as
buyers of securities during the last
week. chiefly in the bond section.
Banks are also in q position to very
materially mark up book values on
their Investments through the steady
upturn in values, and many securi-
ties that have been heavily written
of have been scheduled as worth
much more money, while many new
investment purchases show hand
some paper profits. much of which
Will surely De gathered III.
A year ago the regional bank OF
New York held bills amounting to
$64S,7A3.0o0, while the entire reserve
system reports but $640,110.000 for
the current week.
It Is expected in time that the de-
mand for funds for business interests
will show a material enlargement
sooner or later, but the weather has
been unreasonable. and merchants
are going slow, with intent to be on
the aafe side as to stocks and tnven-
tories-one awful dose Of inventories
has been proof against the second
like situation.
Money is going into another easy
week, investors will be out after
bonds from the top of the opening
bell, and higher averages Will marx
the week-in bonds, If not In both
bonds and stocks.
The manner in which the STOCK
movements of the last two or three
weeks has Inspired more confidence
in the position Of stocks.
washington bonds are at their
highest prices Of the year. and are
gradually creeping to higher levels.
lent demand, and the indications are
for better, rather than lower, prices.
Eaauna .. welfe Honored.
Edmund s. Wolfe, formerly cashier Of
the District National Bank, now pres!-
dent of the First National Bank Of
bridgeport, has been elected president
Of the chamber Of commerce OF that
city.
on NJ. VOTES election declares that
'his election insures able and ag-
gressive leadership for that civic
body
Unsouna Money Doemas.
The Bache Review this week con-
tains the following:
I'm periods Of depression. the hard
pressed debtor, who at such times
exists In large numbers, rises to pro-
put him in the debtor class, and ap-
peals to his congressman to help
him out. A good proportion Of con-
Rressmen, under such conditions, gem
orally respond to the appeal. and
campaign for unsound credit or un-
sound currency 10 begun. Such
state Of things existed a year ago:
number OF extravagant measures to
reform the credit or the banking
system, which had been reported to
committees of Congress and buried
in due course in the archives of the
committee. It 10 still. nevertheless
not certain that . campaign for un.
sound money may not yet start UP.
however foolish such a movement
might appear to sensible people.
There would probably be little pros
pect Of this had not two men OF much
prominence taken up, in q very public
way. the advocacy of about the wild
est form of paper imitation that the
genius OF man has ever thought OF.
Shallow Security.
"This 10 brought to mind by the ex-
preston Of Mr.. Henry Ford, through
his secretary, at the Kiwanis Club in
Detroit this week. He said, Tor
inata ncA. sTha sworld has reachAd