• U.S.

Business & Finance: Current Situation: Feb. 4, 1924

2 minute read
TIME

Easier money was the most significant development of the past week; and the question most often asked was whether this was a seasonal phenomenon merely, or the beginning of a considerable decline in interest rates. On this subject, authorities are as usual divided. But the effect of current money conditions on the securities market is at any rate noteworthy. The utility stocks and bonds, which are always first affected by easier money, here showed distinct strength. In fact the further question regarding inflation through excessive gold imports is again arising. A year ago in March, bankers were able to control an undoubted tendency toward credit inflation and a runaway stock market. Now, however, the task would be harder. We have more gold, less active business in many lines, and a Presidential election ahead. No good Republican would particularly enjoy seeing the brakes applied to the money market as hard as to cause a skid downhill similar to that experienced last year. As long as the Federal Reserve Board consists of political appointees, it is somewhat beside the point to declare that politics has nothing to do with business tendencies. This might be so were conditions normal. But they are not normal. We are sitting on a slumbering volcano of excess gold reserves.

More Must-Reads from TIME

Contact us at letters@time.com