Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-08-06

were priced so that they produced
a yield as low as Al per cent. In
casting the new high records day by
day it. was necessary to look back
into the files of Is and 20 years ago
to ind the equivalents Of many Of this
weeks quotations.
Pay President Compliment.
On Wednesday morning Wall Street
paid the President the compliment of
dumping out stocks regardless Of
price because it feared the effect of
his loss as the leader Of the Nation.
Then. with the rest of the country, It
began to speculate on the meaning OF
his words and to find satisfaction In
the possibility that he would really
run again if the majority so desired.
There followed two days of market
bIoyancy and general expressions Of
ama2ement that prices had rallied so
briskly The Federal Reserve Bank
reductions were stimulating. YeSter-
DAYS market gave further signs that
1t wanted to forget politics and play
along on the old set of conditions. 1t
closed under pressure of heavy sales
by those who had bought on NedneS-
days break and also from liquida ton
of the sort that had been going on for
several days.
The most logical reasoning is that
which credits MIR. Coolidge with mean
ing what he said and not likely to
Stultify himself later on by accepting
a nomination. on this premise, we
have a new situation that cannot fail
to affect market values from time to
time. Even if we assume a Republican
victory next year and the election Of
one of the several conservatives now
being named, there will be an interme-
date period of uncertainty and
apathy, neither Of which would have
prevailed with Mr.. Coolidge as the one
party candidate in whom the American
people have absolute confidence.
Therefore we must expect n certain
amount of hesitation in banking and
business circles that would not have
prevailed should the program to re-
nominate Mr.. Coolidge been carried
out.
There is always some unexpected
incident that crops mp in n bull
market and checks it's advance just
when it seems to be resting on it's
sOundest foundations. The Coolidge
note may prove to he the factor
bringing temporary halt 10 specu-
lative conditions that have prevailed
since the Autumn of 1924
Influences of Easy Money.
Strangely enough. this confusing
political episode came within a few
hours Of another development that
would ordinarily benefit the market.
namely. the reduction in the rate of
discount by The Federal Reserve
Banks Of ST. Louis. New York and
Boston, following similar action last
week at Kansas city. Those who are
confident that stocks will go on ris
ing base their conclusions on the
predominance Of cheap money over
all of the Influences affecting pres
ing. There Is grave question
whether the discount reduction is
sound as Il banking policy. 1t will
stimulate speculation when specula-
ton should he curhed. However. the
practical effect Of it is 10 drive funds
ouf Of tho hanks and trust COM
narios into the markets for sccu-
rites as the only remaining source
from which profitable returns on
capital may he obtained
Business as n whole IS now In
need of lower rates. All the large
commercial banks have for months
been offering their regular mercan-
tile and industrial customers unusu-
ally liberal lines Of credit at low
rates of interest only to have them
rejected. The percentage Of money
loaned on call. or against securities,
has been rapidly rising while the
ratio Of commercial loans has been
falling
Tho affect ~ tho Az per cent dis