Evening star., 1925-11-15
BY /. 4. FLEMING.

An attempt on the part of the finan.
elal authorities and private-wire cor
respondents to create the impression
that there is possibility of a money
panic. In view of the great activity
ana high prices current on Wall
Street. as we'll as the advancement
of slight increases in the rediscount
rate Of one or two Federal Reserve
banks. as a rea son for the bad break
i'll stocks early last week, is simply
ludicrous.
For over one year the srock mar
Net has been enjoying the widest
Kind OF a boom, running rough shod
over every bear attempt to make
capital out of rumors and past-due
reactions, with the largest aggregate
business on record for many days,
weeks and months, and now when
there Is some profit taking. when a
natural reaction develops, when some
brokers. noting their topheavy hold.
ings Of securities. some not SO strong.
ly margined as they might be. have
given orders to office managers %
scrutinize orders carefully, to call ad-
ditional margins and to stop taking
margin orders entirely, they must,
perforce, have an excuse-an ad-
Vace in rediscount rate.
1t has been long time since money
cut any figure IN the market on the
bear side; in fact. the situation has
so completely changed 1t has come to
be matter of finding a place to use
money rather than any probable
tightening Of the market for the
circulating commodity,
AS matter OF fact, tight money has
probably gone forever If it is a
factor on the bear side today, it is
only In the pocketbooks and bank
accounts Of those traders in specula-
tive securities who have overpIayed
and overstayed their marekt
View Upheld by w. b. Hibbs.
This view OF the situation is con.
firmed by no less an authority than
w. B. Hibbs, who in commenting
thereon said:
Money panic-rot, The trouble
with the banks these days is to keep
their millions working. The break in
the stock market was due to over
trading and the anxiety on the part
of brokers to reduce their margined
lines, which have become overextend.
ed. 1t is a fact that a larger per-
centage of the buying public is to-
day purchasing securities and actual
ly paying therefor, locking them up.
Money is a drug. everybody seems
to have more of 1t than ever before
There isn't the slightest possibil-
ity of money panic-a reaction in
stocks would be but natural, and it
would also be healthy"
Ratio Of Reserve 17.2 Per Cent.
The ratio of reserve of the Federal
Reserve system to liabilities is at the
high record of I7.2 per cent, nearly
6 per cent higher than it was 10
days ago. showing that there has
been quite a reduction from the linn
tied rediscounting of banks in the
system.
Very few banks are using the re-
discount privileges these days, hav-
ing all the cash they require and
more, too, In their own vaults.
Real estate mortgages furnish the
most general employment for funds
today and. fortunately, they are the
safest form OF investment, when
through careful and reputable invest
ment houses.
Mergenthaler's Annual Meeting.
The annual meeting of the Mergen-
thaier Linotype Co. viii be held or
Wednesday Of this week. Earnings
will probably be close to 20 per cent.
MerRenthaler shares at 100 or there
about Is one of the best purchases on
the local exchange from the stand
point Of income returns. 1t is one Of
the high grade investments, having
long record of dividend maintenance
with many extras from time to time,
a product that is always in demand.
an increased business abroad, a
heavy cash reserve against its good
will. patents, etc." being without
bonded debt and having fine credit.
There are few local investments that
will return anything like per cent
on market value with prospects for
a continuation of the rate indefinitely