The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-09-25

market OF the week was highly disap-
pointing TO that element which had
built hopes of a moderate speculative
revival upon the increased activities
Of the preceding interval Business
was not quite so dull as in the fore
part Of the month, and irregularity in
the price movement furnished some
little variety for the rank and file in
brokers' offices, but the trading re-
Iapssd into professional hands, and
the market gave indications of falling
back into the same rut that il has
plowed so deep in recent months. on
occasions, when stocks sod of a lit
tie. one heard reports of liquidation in
the market, but If any was in prog
Tess IL represented apparently nothing
more considerable than the selling Of
tired and disappointed holders Bank
ing interests paid no attention 10 these
reports, and the market on the whole
displayed a strong undertone-
Without question the best feature
OF the week was the further improve
ment IN bonds Not only did the vol
Ume OF dealing on the exchange in
crease. but transactions over the
counter reached proportions not at
tanned in months, and these were ne
gOtiated on a basis OF improving
prices
The battsrrsent in the bond bust
ness is confined chiefly TO dealers,
and to some few institutions, the in
dividuaI investor not playing a very
Prominent part in the movement as
vet. but the increased activity on
the Dart Of the dealers is regarded as
foreShadopinE the awakening OF
genuine investment demand, which is
destined to gather force as it de-
veIops.
High-GTade Bonds.
One feature Of the improving invest
ment market, which has attracted
considerable attention, is the fact that
DEVELOPMENT and inquiry have been
along tie lines or the very best issues.
the high grade, low income yielding
securities. instead Of second and third
class bonds, which return large
Weld. such as alone found ready sale
in the market just before the bond
business cam . a stop last spring
with the rnidu--..t injunction restrain
ing freight rae advances and the pas
sa ge of the railway rate bill.
A number OF rather important trans
actions for instance, were concluded be
tween the very large banking houses, or
first hands in the bond market, and the
dealers, OF distributing firms. and IN
each instance the bonds purchased were
Of the best character.
From this bankers draw the inference
that the safety of the principal sum,
rather than income yield, IS the chief
consideration of bend buyers ~ the
rreSeut time, and they attribute the
desire OF investors to conserve their
PRINCIPAL 20 the fact that they have be
eraI trend 81 events, the uncertainties
which surround the political and in
dusrrial future, and the receTt collapse
IN stock prices. The security market
always moves in cycles like this from
fear to confidence, and from confidence
to fear again
The Course Of Revival
After a severe shock. money always
aCCumulates. Il seeks employment, and
as investors are timid, it finds It first IN
good bonds, then. as they find perfect
security and q good income in their
operations. men become emboIdened.
their operations encourage others. and
greater chances are taken, and so on.
the movement gathering in numbers
and expanding IN scope, until finally
bonds and stocks, good, bad, and in
different alike, are bought for invest
ment or speculativeiy, confidently, then
recklessIy- with little OF no COnsideTa-
ton Of value, or income yield, and then
the market has reached a stage where II
IS preparing for one Of its coIIapses
and for a repetition OF the whole per
Torrance 70 one ever knows definitely
the bottom or the top of market, but
one can determine tendencies. Securi-
ties are always strongest after a col
lapse, when they are low, and, other
things being equal, they weaken in al
most direct ratio as they advance, but
these are considerations that weigh
more with investors than with specu-
lators.
Though the improving tendencies in
the bond market are genuine, and fore
shadow, IN the natural course Of events
Improvement elsewhere, il seems too
early as yet to expect much improve
market, nor has the investment demand
developed to a degree where one can
look foT the notation of new issues by
railway and Industrial corporations
OF course, the latter is the feature
which most deeply concerns corporation
managers, for the resale Of old bonds
and the cleaning up Of the odds and
ends Of last years hOtations, ad6 no
new money to corporation treasures,
and co not provide the means for ex-
tensive development and constructive
work. such as would check the com
mercial reaction, or stimulate indus
trial recovery. However. there are too
many other matters, which impose a
barrier 10 business revival, to encourag e
the hope Of immediate recovery even
II corporations could resume financing
upon an extensive scale
Market Incidents.
All markets, at the present time, are
clearly in the grip OF politics, and that
fact is to be noted, though I for one
believe that this is merely the substi-
tuition OF one sO-caIled disturbing factor
for others which were regarded as the
unsettllng influences in the past.
When the discussion of the political
campaign has passed away, or when
its effects have been minimized as a re
suit Of the election, I look to see the
old factors reaSSert themselves, or new
ones crop up which speculative Wall
Street VIII hold to be disturbing causes,
and this simply because Il seems to me
that the markets are restrained by the
general cause of unsettled confidence,
resulting from q combination Cf many
things. and that political uncertainties.
the industrial trust cases, the question
OF railway rate advances, and the
Ike. are but incidents
Speculative Wall Street, IF course. al
WAYS selects some one feature to &C
count for its reactionary markets, and
aSSuredfE II has not been at a loss for