Salt Lake Telegram | 1929-03-31 | Page 26 | Weekly Market Letter

Weekly Market Letter By Taylor J. J Chamberlain Vice President National Copper Co After months of discussion an and concern over the tho speculative movement movement move move- ment ot of stocks and the growing nfl nfl- un certainty over the credit situation conditions appear apper to be as complicated compU- compU as ever Public enthusiasm I under the stimulus of quick and andeas easy profits readily forgets ot of averages which sooner or later laer must result in ill definite defnie readjust readjust- ments During 1927 and the early part pat ot of 1928 we experienced such an enthusiastic demand for bonds that tat advances of two to five points were not uncommon for new issues on the first day Of their of- of fering Looking back and even cen granting that a money marl market et partly paty of am an artificial character gave imp to this mOVement In bond prices pries the turn of the marl market et came rather rather- rather In the same manner but on a target larger scale the stock market has forged ahead even een under recent reent cr dit conditions For several months the tho federal reserve reser e board has been beert endeavoring endeavor endeavor- vor- vor ing to accomplish a reduction In the large supply of funds employed In speculative channels and amI at the same time Isas been reluctant to apply measures which might might cause a break In the market or have an adverse effect on general business The large New York banks have ha supported the efforts of the s system stem as evidenced b by the reduction re- re ducton of brokers brokers' loans by New NewYork NewYork York member banks since last lat year and also by their relatively liquid position as c compared wl with h Inter interior or banKs Although the statement ISsued ISsued IS- IS I DanKs tie sued last week b by the Chicago go federal federl fed fed- fedI I eral erl reserve bank does doc not bear out the remark we are firmly of the opinion that Chicago and interior banks are endeavoring to cut down loans to brokers and reduce their rediscounts with wih the federal reserve bank bank It Is felt that Chicago Chiago and interior banks are ae carrying too large lre a. a a portion porton of the burden burde and the cannot cannot continue without with with- out causing business s to suffer Without attempting to predict the movement of the stock market the influence of the reserve system supported supported sup sup- ported by the country's counts leading banks must be recognized Loans are ae being beig scrutinized carefully and andI I the stock market ill n wl be obliged to nay dearly derly for additional funds It is not not so so much a a queston question of the price level for stocks as whether the maket market is t td nearly nealy six si billion tion ton dollars to finance isopera- isopera During the past week several lage large banks have liquidated sub sub- blocks of bonds largely United states government obliga- obliga tons It I Is reasonable to expect further liquidation before the bond market shod any definite un- un provement Forecasting a continuance ance of firm fim money tes rate on bank were raised raise 4 1 ot of 1 per cent on Thursday Emphasis Is placed on the fact that acceptance acceptance accept accept- ance rates are ly out of line lne with wih prevailing rediscount rates One of the leading statistical es has commented at erable length leng on the popularity of stocks over bonds for individual ual in- in estors The opinion is expressed that equities rather than bonds will wil continue In favor With Wih the pubU more than ever before we may expect some Canges Inthe former rates between yields yields' on stocks and bonds Investment trusts will wl also be a very Important fa factor fac- fac tor first in the stock market ard and In bonds secondly t J