127 North Dearborn Street, Chicago INCORPORATED 345 Madison Avenue, New York Capital and Surplus over $5,000,000 In writing to advertisers please mention SCRIBNER'S MAGAZINE THIS HIS was asserted to be proved by the fact that Federal Reserve rediscounts in election week stood only at $229,000,000, as compared with $300,000,000 at the beginning of September, and with $1,800,000,000 when the "bull market" of 1919 began; also Markets by the fact that, whereas average in 1924 and 1919 prices of commodities, when the Stock Exchange speculation grew violent in 1919, were double the pre-war average and were rising excitedly, the of average November, 1920, was only 60 per cent above 1914, and the season's advance in prices had been almost entirely limited to foodstuffs. Finally, it was contended that the underlying financial influences which called into existence the bull market of November, 1924, differed entirely from those which prevailed in the unsound and ultimately disastrous "Stock Exchange boom" of 1919. In the earlier year, it was argued, credit was already under a heavy strain when the rise in stocks began; the immense drafts on private accumulations to finance the war and float the war loans had exceeded the legitimate surplus fund. The financial situation, both in Europe and in the United States, was economically unfavorable; Europe's currencies being at that time subject to progressive inflation and the various budgets of public revenue handicapped by numerous deficits, while both Europe and the United States were confronted by the certainty of a huge shrinkage in the aggregate purchasing power through cessation of the artificial war requirements. circumstances the advance in UNDER such ci Stock Exchange prices during 1919 was Adair Realty & Trust Company reflection of nothing but dangerous credit and To such a picture, it was very generally asserted in and out of Wall Street, the situation of November in 1924 presented, not resemblance but diametrical contrast. Europe was in the way of economic and political recovery. Budgets had been very generally balanced on that continent; currencies had been reformed. The reparations deadlock, with its paralyzing influence on continental recovery, had been (Financial Situation, continued on page 65) The South's Oldest Mortgage Investment House Founded 1865 PHILADELPHIA Packard Building ATLANTA PROTECTION JACKSONVILLE NEW YORK Adair Realty & Mortgage Co., Exclusive Distributors 270 Madison Ave. Adair Realty & Trust Co., Healey Building, Atlanta. Gentlemen:-Kindly send me descriptive circular and full information about Name Your 7% First Mortgage Bonds. How these bonds may be guaranteed on a basis to yield 6%%. Address broken. Germany, the economic derelict of a year ago, had been placed on its feet by the international agreement in the Dawes committee's recommendations; it had returned to the gold standard and gold payments. The United States, months before November, had rebuilt its economic structure on the firmest of foundations, except for the half-insolvent agricultural West, where the low price of wheat had blocked recuperation, and for the cotton-spinning East, which had been industrially paralyzed by the failure of three successive cotton crops. But even these two formidable obstacles to full economic recuperation had been swept aside, suddenly and wholly contrary to the financial market's expectation, by an abundant grain harvest sold at the most remunerative prices since the war, and by possibly the largest American cotton crop in half a dozen years, ample to meet all requirements of the spinning industry, and to set the wheels of the deadlocked, textile trade in motion. Such reversal of conditions, it was concluded by hopeful watchers of the situation, warranted even such an extensive movement as had occurred on the Stock Exchange not less so, when the buying orders which would naturally have sought the investment market while the windfall of agricultural fortune was being enlarged and emphasized daily during September and October, had been held back because of fear of a dead locked national election and a season of politi cal chaos. ORD RDINARILY the business community; which is by nature receptive of cheerful indications, and the financial experts, who have seen the prophecy of old-time "bull markets" fulfilled by subsequent trade revival, will adopt Is It an "Inflation Move ment"? without dispute this view of a vigorous advance on the Stock Exchange. There were some unusual circumstances, however, in the November market. During more than a year, speculative Wall Street had predicted and conservative bankers had warned against an "inflation movement" in the field of prices. It had repeatedly been asserted, and not by inexperienced observers, that the piling-up of an utterly unprecedented stock of gold in the United States was bound to create such a situation. A year ago these American gold holdings were one billion dollars greater than at the end of the war; they had, increased nearly half a billion further at the beginning of November, IDEAL FOR CONSERVATIVE INVESTORS THEY fulfill every requirement of an ideal security-safety and regularity of income-permanence of investment-convenience of form-ready marketability-long and favorable record. GUARANTEED STOCKS represent the ownership of original sections of what are now our foremost trunk line railroads. Being the first to be built, these properties are located in our greatest centers of population and industrial development and control what is perhaps the richest railroad territory in the world. They were acquired by the trunk lines through leases and the dividends on their stocks are a fixed charge upon the earnings of the guarantors as is the interest on bonds. Investors are invited to write for specific Joseph Walker & Sons FOUNDED 1855 61 BROADWAY, NEW YORK CITY When 1924. With the existing machinery for expansion of bank credit on the basis of an expanding gold reserve, it was contended in many quarters that inflation of prices, with the resultant financial disorder, was an imminent peril. the spring trade revival of 1923 and the accompanying rise on the Stock Exchange were suddenly checked, a wide-spread belief prevailed that only the positive intervention of the banks and the Federal Reserve, to stop the expansion of credit, had prevented such a sequel. 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