The Washington times., 1928-08-28
HIGH MONEY TO
CONTINUE, IS
BELIEF
By RICHARD HATTON

/. mentstors as the month of August
comes to q close. THE advance in
money rates" says Commerce
Monthly. published by the National
Bank OF Commerce. New York,
''haa assumed a more important
aspect in recent weeks, not only In
financial markets but also as q
possible disturbing influence on an
otherwise favorable general bust
ness outlook" The same publica-
ton finds the present credit situa-
ton one "entirely different from
that to which American business
has been accustomed in recent
wears, and one which may exert an
appreciable influence on the course
of trade"
The credit condition of the coun-
try continues sound. but high rates
for both call and time money may
he expected to continue for weeks,
and ! possibly months, the BROOK
nlire Economic Service. Inc, states
in its current review of money and
trade conditions in the United
States. Commenting upon present
the service says: the
Federal Reserve ratio is now close
to 20 per cent, showing substantial
Improvement since June and in
dicating the underlying strength II
the system. On the other hand,
member hanks have not greatly
reduced their obligations to the
system and member banks borrow.
ings are still held to be too high.
Accordingly, rates are holding at q
high level for both commercial ana
speculative purposes, although the
tendency is to penslize speculation
and to assist business. In the
\ stock market the public and some
operators are somewhat Indifferent
to high money. but the more con-
sentative brokerage houses are 90
operating with their banks in an
effort to keep loans well in hand
Trend Favorable
The bureau of business conditions
OF the Alexander Hamilton Institute
finds the trend OF business during the
last few months generally favorable,
hut adds: THE factor which is caus-
ing the most concern at the present
slime is the high level of money rates
Tight money will naturally exert re-
, straining influence upon business ex-
pansion this fall. Credit expansion,
however, should not prove SUFFICIENT
~ serious to nullify the influence OF
the many favorable features which
characterize the business situation at
the present time. While business
may not show any unusual expan-
sion this fail, activity should be at
least well sustained"
From the stock market angle the
subject is covered in the r. a. Pierce
& Co. fortnightly review as follows:
THE cleavage between the influ-
ence OF expanding earnings and the
influence OF high money appears
definitely to have widened during the
past fortnight. With no develop
) ments TO indicate that there would be
in the near future an increase in the
supply OF credit and. consequently,
decrease in money rates, selected in.
dustrial stocks have persisted agrees
sively in their advances. The result
has been the establishment Of new
1928 high for the Dow. Jones indus
trial averages. In other words, the
effects of the June decline have been
completely eliminated and, in fact,
at this writing signs are not wanting
OF definite renewal of a primary adj
vance. We believe that majority
opinion Is at this time quite willing
Pho abandon the idea that the strength
in the industrials during the past two
months has been simply a creeping
rally. There is, or course, danger in
the TOO enthusiastic acceptance of the
buying side. but thus far the ex-
treme selectivity OF the market has
prevented excuses.
Indiscrlminate Buying
iii will be recalled that in the
weeks preceding the June break the
market absolutely abandoned the
principle OF selectivjty and buying in
May and in the early part of June
. could properly have been described
as indiscriminate. The correction
was almost immediate and we believe
that discrimination and selectivity
are most important principles TO
keep in mind in the present phase
of the market. We cannot believe
that the general situation will admit
of a return to the markets OF last
May. IL such a condition should de-
yelop correction probably would
speedily ensue. 1t has been possible
to determine logical reasons for the
advances in those industrialS which
have been the object Of concentrated
. buying and in practically every case
II IL the individual situation Of
strong earnings and apparently ex.
cellent prospects which appear to
have guided the buyer"
Vice President j. Newton Brewer,
OF Swartzell, Rheem & Hensey Co.,
has returned from Rehoboth Beach,
where he spent his vacation.
Joseph Schiavone, former presi-
Asnt OF the Jnterna tionaI Exchange
Bank and present head OF the Schia.
vope Departmental Service. mas re-
turned from Seagirt, N.a j.; where
he had been in conference with Coy
Pernor Edwards and other Demo.
cratic leaders.
A. j. FAINT. Of the National Saw
inEs d Trust Co. is at Atlantic City
Tor months vacation.
President Fernando cunibarii. Of
the lnternationl Exchange Bank
has returned from vacation trip
to- Old Point Comfort, Va
Frank Ullmer, OF the National
Savings & Trust Co., has returned
from a motor trip in Pennsylvania
CHICAGO GRAIN MARKET
y CHICAGO. Aug. 2S.-Grains
was off y to &c; Corn, unchanged
! TO NC up, and oats. unchanged to