Evening star., 1922-09-23
|ST|RR|NG EVENTS
INFLUENCE MARKET
Financial interests Affected
Partly by Threatened Clash
Over Dardaneues.
OTHER FOREIGN ISSUES
Increase of Industrial Activity in
! U. S. Also a Factor of
the Week.
OTHER FOREIGN ISSUES
BY STUART II. WEST,
Special Correspondent Of The Star.

Special Correspondent of The Star.
Copyright, 1922. by The stary
NEW YORK, September 23.-The
chief events of the past week bearing
upon the financial markets were the
threatened clash between British and
Turks at the Dardanelles, the adjust
ment of the dispute between Ger
many and Belgium over the deferred
Preparations payments, the increase
iof mill and factory production fol-
lowing the settlement of the coal
strikes and the virtual settlement OF
the railway shopmen's strike and the
moderate raising of money rates.
Whatever may be the outcome OF
the Turkish crisis, it's immediate ef-
fects have been beneficial to the
American farmer. The wheat market
turning from it's prolonged decline
i mas had recovery of approximately
10 cents buShel. This has been a
heip to business sentiment in the
| west, even though it is not sure to
be lasting.
Has Steadying Effect.
The arrangement under which Ger
man gold and securities are to be
deposited with the bank of England
as guarantee for the six months
treasury notes issued to Belgium in
lieu of cash. has had steadying ef-
feet upon the German mark despite
| tne continued outpour of new paper
currency. Banking opinion, however,
| is skeptical on this subject, and nat
| rrally so. With German printing
presses turning out paper marks at
the rate of over two and one-half bill
| lions a day, no respite in the indem-
|, g -
prevent further depreciation.
I Ihe only way German currency can
be stabilized is for the note increa Sc
to be stopped, and this can only hap
pen when halt is called upon the
| extravagant borrowing now going on
by the German government and by
commercial interests, which. owing to
| the great rise in prices, require con-
| stantly increasing credits.
German Discount Rate Rises.
The reichsbank has sought to meet
| the emergency by still another ad-
| vance III its rate of discount. This
| rate. which up to the end Of July
stood at ) per cent. now stands ats.
| The practical significance Of this is
that along with the increase in every
| other direction, the price of credit
/: has gone up. too But whether this
| raising of the official discount charge
| to the highest on record will have
/ thc Oh CneckinR the eX-
| pansion in loan accounts, is alto
| gethcr doubtful.
! German business men, who saw
! their living costs go up over 40 per
| cent in single month of August
| are not likely to balk at paying S
per cent for their money when they
| used to pay 5. The main trouble has
been the necessity of the German
| goverpment to raise funds for the
| purchase of foreign currencies. with
which to meet installments of the in
! demnitE. In the last ten days of Au-
gust alone treasury bills presented
| for discount at the reichsbank
amounted to the terrific sum of 49,
! 000.000,000 marks. If. as the result
| of the postponement of further cash
! payments, a stop is put to this gov
! ernment borrowing. the German
! financial situation might take turn
, for the better. The next week or so
will tell the story.
! Drop in American Exports.
| Our total merchandise exports for
August We're only $500 100000. the
smallest of any month this year with
! the exception of January and Febru-
aTy. and $65.000,000 less than those of
August year ago, when the domestic
trade collapse was at its worst. These
! Figures have shown decisively that the
Irecovery of the last twelve months in
home industry has brought no re-
sponse in the foreign commerce. and
until there is an improvement in this
iquarter there can be nothing in the
nature Of a trade BOOM American in
dustry can get along fairly we'll rely
ing upon the domestic market alone.
; but there has never been an era of
great prosperity in this country with
out an active and profitable foreign
! trade.
No Money Strain Indicated.
The advance i'm call money to per
cent and the slight hardening of quo
the seasonal demands for money in
the crop districts, but they do not
suggest anything resem bling strain.
From the banking viewpoint a per
cent money rate through the autumn
months is altogether healthy and de-
Withdrawals press too hard, extra
credit could be Immediately obtained
through use of the rediscount privi-
ilege at the federal reserve banks.
Under present-day conditions the
real criterion of money-market condi-
| tions is not the individual bank loan
accounts or the individual surplus re-
! serves, but the movement of federal
; reserve bill holdings. The increase in
this item from the very lowest of the
year is only S51 900, ,000 most of which
occurred within the last week. The
present total of bills discounted by the
! federal bank at the instance of mem
| ber banks is $4,000, 900, as asains st
more than $4,000, 100000 in the early
part of 1920.
| These comparisons bear witness to
how very slight the pressure of the
agricultural demands has thus far
been, and illustrate also the immense
potentialitieS for credit expansion
! which lie in the present position of
/! the federal reserve institutions should
actual need arise.
! Stock Market Reacts.
| The effect Of the higher money rates
| is, no doubt, accountable to some ex-
| tent for the check which has become
more pronounced upon the advancing
| tendency of investment securities. The
speculate stock market has paid at
| tention to outside affairs only asthese
/ have fitted in with it's own interior re-
| adjustment. After two months of al
most uninterrupted advance, during
; which individual values were pushed
ahead pretty fast and far, the market
| has had the inevitable reaction. In
! the belief of many good observers it
| is a lull like that which occurred in
June, between two periods of active
(; speculation, this belief being based
upon the expectation that the markets
have not yet discounted the good busi-
ness year which is commonly looked
for in 1928.
DIVIDENDS.