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Show movts "toward peace PAVORABLUffECT MARKET Giant Steel Corporations Increasing Products; Stocks Are Again Strong and Money Feature Is Not Relaxing. Ey W. S. COUSINS, Editor The American Banker. NEW YORK, Feb. 2. Sharp advances ad-vances were made in nearly every section of the speculative markets this week, accounted for partly by a hurrying to cover short commit com-mit men t.s and partly by the persstence of peace rumors which come from every . I-.'uropean capital. Thre 'is a disposition ; In financial markets to place a very favorable fa-vorable Interpret u lion on the unmistak-i unmistak-i able evidences of rupture which come out from the central empires, and, in the j opinion of many people, the "crack" in ! (Jermany's economic position which has I been so long awaited and expected, is j acout to make ia appearance. Gratify-' Gratify-' ing statements u'omitted this week by ; our giant industrial corporations ar in-l in-l dlciitive of satisfactory conditions in the field of big manufacturing, and confidence confi-dence was inspired 'by the assurance given by Charles M. Schwab of trie Bel hlehem Steel company, that no new tina nc ing was contemplated during IMS. "We are not worried." said he. "as tu where Heinle Hein-le hem is goinc to obtain the necessary funds to complete the big orders on its books. Thu statement of the X'nited States Steel corporation shows total earnings in the fourth quarter ot 11 1 7 amounting to i ?ofl,72-l,l 1V, a t ier making allowance for $j0,050,3H-l paid into the government treasury as war income a nd excess profits tax. 01-airman Gary slated that t lie United States Steel corporation lias no new financing in contemplation, and that Its liquid assets are more than sufficient suf-ficient to meet all requirements. Total earnings of the company for 1017 aggregated aggre-gated j;":;i,6t'S,131. after charging, off $212.47.240 to government taxes, ef. It is expected this amount will he increased to S2-'Jo,0ini,Cn 0 when final returns are made to Washington. In lOlti. when no appropriations were made fm var In- , come and excess profits, the C'ora- ' lion's total earnings were i:i42.,l.,iJ71,-'!,2. The statement for the last quarter of I 1M7 also shows that ?j".uu0,000 lias been appropriated for expend It ures made and to be made, including new plants and construction. Next Loan Foreshadowed. The annual report of the Bethlehem Steel corporation for the yetir endim cember 1017, shows a net income of ?3r,-"2'l.737 ?3r,-"2'l.737 after all deductions, including taxes. This compares with $4C.o)3,C,l in 1016, during which period, however, war taxes were not collected by tne government govern-ment treasury. Conditions in the money market now are beginning to foreshadow preparations for the next government loan. Hanks are inclined in-clined to bring pressure to bear upon borrowers bor-rowers who are in a posi t ion to reduce their obligations, arrd thus clear the decks for action Jn anticipation of the next Liberty loan drive. Secretary Mc.Wioo's statement that the treasury desired prompt action on the administration's railroad bill in view of the necessity for making preparations for $1ij,000.C'0AXi tha t the government will be compelled to borrow before June 30, has attracted a t lent ion. It is obvious, however, that the impression derived from the statement state-ment has been altogether erroneous. As a t present understood, the treasury will start its campaign for the next war loan in March, end It is- expected that the first installment payment, which for those who desire it mav aI?o be regards! as the date for full payment, will be about April 22. as temporary' 1 reasury obliga -tions issued in a n tic! pat ion of proceeds from this loan mature on the dale in question. If the treasury should decide on a loan for that date it would of course be a very short time to allow for another loan to come as early as June 30. However, How-ever, no one has any idea that the treasury treas-ury expects to make an appeal at one bite for the straight Sl.0ny.f0ii.000. The more general opinion is that two popular popu-lar appeals will be made before the end of June, with the second prohs bly overlapping' over-lapping' the fiscal yen:-, but being covered by certificates of indebtedness in anticipation antici-pation of the proceeds of this second loan. Popular Investments. An important evolution in current investment in-vestment conditions is the prominence given by sto ck exchange houses of the highest standing to the popu'ar investments invest-ments commonly know n as the "penny stocks." It is not so many years since that offerings of oil and mining shares at "popular"' prices were confined almost entirely to sources of questionable standing, stand-ing, and all who v entured therein gained experience but lost money. Today there Is a recognized need for safe avenues of investment for tne modest funds of the thrifty; and investment orga niza tions of the highest standing are catering to the needs of the small investor by furnishing "dollar stocks" representing enterprises of unquestioned merit. This is an innovation innova-tion yrhloh should meet with wide approval ap-proval and should be attended with beneficent results. In line with the efforts of business leaders to develop trade relationships on an extensive scare with the sister republics repub-lics of South America, comes the announcement an-nouncement that many of our important hanking institutions are forming important im-portant connections with the banks of these republics. The federal reserve bank has just completed arrangements with the Banco Naeion at Buenos Aires, under which commercial credits will be issued by the latter institution against deposits of funds in Xew York. Federal Reserve System. The federal reserve bank proposes to handle these transactions on the basis of par for pesos phis 3 per cent commission commis-sion to cover what would be the usual cost of shipping gold to Argentina. This will become, therefore, an ussuranee that in trade with Argentina, our dollar will be worth at least &7 cents white t lie war lasts, or until we sell to Argentina as much goods as we buy from that country. Before such credits are issued it will he necessary, however, for banks making the application to show that exchange on Buenos Aires is wanted to cover actual commercial transactions and is not sough.: merely to effect a transfer of funds, possibly pos-sibly for specida ti ve purposes. Meantime, Mean-time, sever;1 1 million dollars more go la belonging io Argentina lias been deposited depos-ited w i : h the local reserve ba n k . Under the arrangement be t ween the treasury department and the Banco dr 1?. Xacion. the amount that has been tentatively ten-tatively fixed as the limit required for stabilising dollar excha nge in Argem ina is $40,'X'CM'Gi This, however, may be increased in-creased as the needs arise. Benefits Are Derived. An insight into the benefits derived from the opera! ion of the federal reserve bank in war time is to be seen in the annual an-nual report of the reserve board, presented pre-sented to congress last week. Recognition Recogni-tion of the indispensable services of the new banking system in the flotation of government "war loans has become one of the axioms of business: but it is not in this capacity that the reserve banks hae shown their largest usefulness. One of the striking innovations introduced intro-duced by the reserve syMem has been the partial elimination of the national bank notes, based upon the nilional debt, and the substitution of reserve bank notes, which represent assets and not liabilities. liabili-ties. There are now in circulation federal reserve rotes to the a mount of S1.34S,-O.M.rt.o. S1.34S,-O.M.rt.o. while the volume of national bank noifcs is o:i'iv 2.-: Another important resolution made possible pos-sible by t'ne reserve system has been the legalizing of acceptances, and the popular-(zing popular-(zing of this form of credit instrument in preference to the "open book'" accounts. Merchants and manufactures, as well as bankers, have given their unqualified approval ap-proval to the acceptance and its increas ing Importance to legitimate business Is readily acknowledged on all sides. Commodity Prices. Notwithstanding government regulations in the matter of the sale of commodities, and strict supervision in the t-arrying out of the same, prices have continually advanced. ad-vanced. In the, early part of the present month. Dun's index number was 22.7, which is the hignest point touched since Me civil war. As a matter of comparison, hrcvirver, present index compares w:th 312.72 In September, ISM, that figure due largely to the depreciated currency of the time. It is evident that in some respects the government's prh-e fixing scheme has not b.)en ua successful an had been hoped for it. even granted that it has checked abnormalities in certain lines. While keeping down prices It has not stimulated production, and in this respect lies its chief limitation. Kxtremely strong conditions continue the outstanding feature in the cash markets mar-kets for the commodities in most general consumption. Restricted production and limited arrivals, due largely to the inclement in-clement weather, had a stimulating effect on the values of dairy products, although the high level of quotations tends to diminish di-minish demand. In the grain markets, wheat and flour are at the fixed prices, and there is little change in corn, but a substantia rise in quotations of rye, oats and barley. Live meats are somewhat irregular, beef being fairly steady and hogs and sheep inclined to easiness, while in provisions the tone, as a whole, is weaker. The iron and steel markets are maintained on the basis fixed by the government gov-ernment or by agreement, and, except for some reduction in spelter and lead, no particular movement occurred in the minor metals, prices of tin being entirely nominal. |