Current Situation

Relative stability and prosperity in general business continue, with a tendency to watch the money markets for signs of overexpansion or overenthusiasm. As yet, however, the money market gives little or no sign of such developments or the anticipation of them. Nervous stock traders bandy rumors of a rise in the Reserve rate, but nothing happens.

The arrival of the French financial mission headed by Mr. Caillaux (see Page 6) has been the occasion of renewed anticipations of heavy foreign borrowing this winter, which has been held in check by the debt funding.

In U. S. banking circles, the gradual economic and financial recovery of most European countries is now generally recognized, although this is infrequently accompanied by enthusiasm for foreign investments. However, economists have long predicted that our credits and te some extent our current trade balances must be adjusted with Europe by importing securities. This winter it looks as if such securities could be made and sold here without too great risk to lenders and without exorbitant interest rates to borrowers. If so, a new stage in the history of the U. S. as a creditor nation will be introduced.