Evening star., 1924-10-05
MARKET SLOW-UP
LAID TO MONEY
Current interest Charges Al
ways Vital Factor in
Wall Street.
BUYING STILL CAUTIOUS
Terms of Coming German Loan Re
main Secret-Silver Bullion
Now Highest Since 1922
BUYING STILL CAUTIOUS
Bl GEORGE T. GHES.

Sppcisl Dispatch to The star
NEW YORK, October 4-Consider-
ing the uncertainties of presidential
year. the investment market this
week has given good account of
itself. For the note Of hesitation
which crept in at the close, the slight
hardening of money incident to tho
October | requirements is sufficient
explanation. 1t must always b.
bourne IN mind that the strength "f in
vestment bonds is founded almost
entirely upon the current low inter
est charges.
As long as il is more prnfitar,"
for banks to put their money tns"
securities than /" employ il in husl-
ness there will be good support for
hi gh- grade bonds A. long aS trad
ers can make a prott on tn" margin
between what they have TO pay for
borrowed funds and the return middle
and second grade bonds give at cur
rent prices. there Will also be support
for this section of the market. Minor
fluctuations must not be allowed 10
obscure this Fundamental fact.
High silver Vital Factor.
For the long range outlook. how
ever. there are many other factors
10 BE- taken into consideration. One
of these is the probable outlook for
cOfnmD prices AIOHS TINS liiie II
may be significant that this week wit
messed the highest price for silver
bullion since September, 1922.
The quotation Of 7hl4 cents an ounce
on Friday was - cents above the 10"
this wear. The commonly accepted eN-
planation IL the heavy demand from IN"
far East. chiefly India and China Yet
financial history shows that an advance
in silver is often the signal for an ad
In ri her words
il is perfectly possible that il is not sill
yer that is going up. but gold that Is
going down. and il Is an investment
axiom that rising prices for commodi-
ties and rising prices for Sh-grade So
curities do not 60 togther
Turn in Pig Iron Likely.
Secondly rig iron production for Sep
tember, as reported this week. shows
10 per cent increase over August ia
daily rate of output. The low point was
reached in july. Since that time there
has been small but real gain. Produc-
ton is still far below MAY, and still
ia rther below the high Of the year in
March. 1t may net be that the change
in trend is IL ornament. The October re-
port will tell more about that. But II
the turn has come in pig iron il * Of no
small Importance to the investment out
look.
Pig iron production Is rightly con
sidered as foreShadowing the course or
general business. And if trade is 10 re
vive on an extensive scale. business men
are going to compete in the market for
the money now being used for the pur-
chase of securities. The significance Of
these iron-nroduction statistics was
pointed out by Col. AyreS OF the Ci"rc-
land Trust 60. in his discussion boforc
the investment bankers at Cleveland a
week ago.
Heavy Day-fo-Day Buying.
Meanwhile. the carloadiue figures
show that an enormous distributive
business is now being done. For tho
week ending September 20. reVenu"
carloadings were greater than for
any single week this Year. and wer"
only little below the highest week
in the history of the carriers. Load
inss for both merchandise and less
than-carload freight were large
than ever before. II j hard to recon
cile these figures With the appa rent
reaction in the steel trade TIL" only
reasonable inference j. that buying
for dayto- day needs is going on on
large scale If this policy were to he
abandoned and merchants begin I"
provide for their requirements in ad
vance trade revival would be assured.
There are some who say that TINS
hand-to-mouth buying has come I"
stay. Such opinions would he speed
ily revised once commodity prices
begin to advance
Surplus Fund. Largest Ever.
All this discussion as to trade out
look is essential 10 any forecast or
the future of investment securities
simply because Of the effect rtNivinG
business would have upon the money
supply The surplus of unused funds
is very large perhaps larger than
al any time in the history OF the
country. 1t is still question Of no"
much business activity il would take
to make an impression upon thes"
accumulate
II would be hazardous to speak to"
confidently as to that. As stated III
this dispatch a week som" of tn
best informed bankers in Wall street
express the opinion that the present
ease in money will continue over =
long period Others. however, expect
the combination OF higher dcGrc"
of business activity and Of the flow
of money abroad To investment il.
foreign securities Will bring about
higher money rates. and that in not
the distant future
Foreign Loans Not Very Large.
SO far. while there have been som"
substantial offerings of new foreign
amount is not large compared with
that expected. Even the long talked
about 500 o00.0 900 German loan viii
not take up much OF the supply.
Financing of foreign industrial cor
porations will be more important in
it's effect. but this awaits the Ger
man loan. And no one knows how
willingly the American investor is
going to accept these new foreign
obligations. He is certainly neglect
ing his opportunities in the market
for seasoned foreign bonds.
There has been more talk this week
of the terms of the new German loan.
A per cent coupon has been sus
gested with the offering price at a
discount. Probably there is no one
single question in which the invest
ment banking community takes so
much interest as it does in these
details about the new German bonds.
Also. probably, there is no invest