The Birmingham age-herald., 1911-03-19
CAUSE OF STOCK MARKET STABILITY Prosperity Abroad Is Hav-
 ing It's Effect ON VERY FIRM BASIS Masses of Securities Are Being Grad ually Absorbed and Passing Out
 of the Control of the
 Market Machinery
By W. G. NICHOLAS


 ing seriously as to underlying causes. The catalog of really favorable causes Is found to be long one and to be made up of the best material. It includes gen. eral and substantial prosperity in all lines of business abroad, Great Britain and all of the important continental countries enjoying a boom such as they have not had in many years; business in its various branches and divisions in this country are discovered to be in very much better shape than pessimists have been trying to make the world believe and back of 1t all Is the continuing and stupendous gold expansion which works day and night for enterprise and uplift. These are a few of the larger stones in the grand foundation of industrial and commercial prosperity. Tn the domestic field it Is noted that the railroads, while not up to the flood tide of last years business which was record-breaking in every respect, are earning within a small fraction of what they were a year ago. The statistics collected by the interstate commerce commission and private agencies show that 1910 earnings were 10 per cent larger than those of 1909. which was the best down to that time. The record for this year might fall off con- siderally from 1910 and still be all that could be reasonably expected. The out look, however, is for another big year, possibly still progressing from the stu Is supposed to be only temporary. It really does not merit the name of re- action, the loss being so slight.
 Furthermore, the statistics of our in ternational trade surpass anything yet known. For the 12 months ending with February the aggregate of our exports and imports was $3,521, 100000, which is better by $500, GOO, 900 than any correspond ing 12 months since the statistics were first collected. Here is the record for the last six years (the 12 months periods ending with February in each easel:
 1911. 8, 521, 1000 1908 .$3, 291, 900, 900 1910. .... a2a, 900 600 1907. 2H94, 900, 900 1eOs . 2S3O,OOO0oo 1906. ~ 2,sS6, 100000
 The excess exports for the eight months ending with February footed up $4lS. .Ooo,- 900, which is also a record-brealking ex- hibit. February exports were $54. 100000 greater than imports as against s, 5000 the other way year ago. The inter- national balance in our favor is running into very large figures and once more our credit balance is becoming an important sense So the rest of the world must pay this trade balance in some way. America can look at the international situation with complacency. At the same time Great Britain and the continent are talk ing immense blocks of our securities, which still further helps Us out. Other countries are not only buying our agri- cultural products and Increasingly of our manufactured goods, but they are taking the bulk of our gold output much the same as they would any mercantile com- modity. During the last eight months we shipped more than s50,O00,00O gold more than we imported. The statement has been made by one of the Guggenheims that the banks of the world have pretty well filled up their gold reserves and will be taking very little more. Somebody seems to have use for the royal metal. however. It does not go begging and must be finding it's way into enterprises looking to the development of the earth's innumerable resources. This gold produc- ton which was the scarecrow of many students fo' finance has thus far been only a benefit to the world. It is the great tonic and nerve force and is per forming a wonderful mission for advance ment. The uplifting process has been almost stealthy. The grand results are being seen more and more every day and while the great central cause is understood, its action as reflected in stock market operations and in general business Is almost beyond the grasp of the popular mind.
 In the narrow stock market sense the ef- feet is seen in the absorption of masses of securities and they are passing out Of the sight of the street and beyond the control of market machinery. Some months ago moneyed people representing the inside view and comprehension of things began licking up the surplus sup plies of stocks and bonds and tucking them away. This stuff does not come out no matter what amount of unfavor- able news Is put into circulation. The bullish situation Is helped out by an ex- tremely easy money market at home and abroad There is abundant capital to finance the stock market through almost any emergency Specially favored people can get 6O-day money now as low as 2% per cent and there are instances where even that low figure has been shaded. Call money ranges only fractionally above 2 per cent and as the great mass or stocks are selling on a and per cent basis 1t will be seen that there is good. safe scalp In buying stocks on borrowed money and holding them. This. however. does not account for the larger mass of stocks that have been bought during the last three or four months. The bulk of the certificates have been bought. out right, paid for and taken out of the mar ket Commission houses complain that they are making next to nothing on their interest account which down to very recent date was the most profitable fea- ture of the brokerage business.
 The market reception of the cut in the New York Central dividend turned out exactly as expected. It has never feazed confidence Central stock itself regained 3 points from the low figure to which 1t was raided on the announcement and the whole market showed that the incident had been discounted. Other roads might do the same thing with equal assur- ance of no Ill effect either on prices or on credit. At the rate the roads are earning the money, however. they may be able to get along without any such reduction Atchison. for instance, is showing especial signs of strength. grow ing out of the belief that 1t will be able to sustain and maintain payments to stockholders at the present rate. The Jeremiahs who represent the converse tional departments of Baltimore and Ohio. T.