Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-04
"a DIGEST
iii E E i'm BUSINESS
By The Tribune.

federal reserve gold holdings to notes
of over IS per cent, the United States
is back to where it stood before the
war. At the close of 1913. Great Bri-
tain had a gold cover of 81 per cent.
BY the close of 1919 this had fallen
to 20 per cent. At the present time,
it stands at about 40 per cent
This does not mean that the golG
ratio must get all the way back to
where it was eight years ago before
sterling returns to its pre-war parity,
But it does show the essential part
which reduction of paper notes in pro-
portion to gold on hand has played in
the recovery of sterling rates.
French Note Circulation Reduced
French note circulation, too, has
been coming down. but only to a sligh'
extent. The ratio of gold to notes
is now something over Is per cent as
against Is per cent in the year 1919
1920. but i'll contrasts with the ratio
of 50 per cent in 1913. Six months
before the war, it already had a gold
cover of "a per cent. This sank to
a minimum of five per cent in 1920,
from which it has risen now to only
six. These comparisons throw light
upon the refusal of the continental
exchanges to respond to the recent
rise in sterling.
Germany Hopes for international Loan
Where paper note initiation has not
been checked, as in the case of most
countries of eastern Europe there has
not been. nor can there be improve
ment in the exchanges. The only rea-
son why the German mark has not
deprecated further during the last
month or so is because of the hope
of an international loan which will
enable Germany to balance its bud
get and put a stop to its terrific ennis
sion of paper.
Call and Time Money Harder
The check to the investment mar
ket has again been very noticeable
sure, have sold again at their high of
two months ago. But the general run
of high grade corporate securities.
such as railway first mortgages, have
gained no ground since the middle of
April and indeed have fallen some
what behind. Two explanations ap-
pear readily enough. One is the evil
dence that the money market struck
absolute bottom when the rate on TIM
loans a fortnight ago fell to 3 81
per cent. This had the usual effect
of a drawing down of New York bal
ances by out of town banks, the re-
suit of which has been seen within
the last few days in a pronounced
hardening Of both call and time money
quotations.
Big Output Of New Issues
The second explanation for the halt
in the upward movement in bond
prices lies in the competition from
the unparalleled output of New Capt.
tai Issues. These flotations last
month aggregated SAT-. 91S.OO0 against
S324.632.O 900 in April and S323, ia 900
in May 1921. For the first five months
Of the year this new financing reached
the prodigious total of S1,377. 931. $50.
While it cannot be said that positive
signs of saturation have yet appeared,
it is clear that the keen edge has
been taken off the investment appe-
tito.
Speculative Movement Uneven
Where the investment market has
paused. the speculative market has
continued to push ahead. This is logi-
cal enough inasmuch as investment
values have all along been mainly gov
erned by the course OF money rates
while speculative values have been con-
nected with the development of the
trade. A year ago the bond market
turned the corner fully two months
before the stock market. That was
because the peak was seen to have
it was not until the end of the sum-