Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-12-08
BEARS IN L|MEL|GHT
FOREIGN War One of Reasons
for Situation.
NEW STOCKS ENCR0ACHING
Standards Are Forced to Meet Stiff
Competition for Favor.
MARKET IS NOW OVERS0LD
Not Until Actual Owners of Securi-
ties Get Panicky Will There
Be Slump.
NEW STOCKS ENCROACHING
MARKET IS NOW 0vERS0LD
BY n. ALLOWAY.

BY n. ALLoWAY.
NEW YORK. December 7.-Everybody
Is bearish A long list of arguments"
is quoted to make clear the Intelligence of
gentlemen who are bears. In this list
are a score Of influences entitled to be
regarded as consequential.
In citation of these bear urgencies for
eign war still commands precedence
| though no sane observer can just tell
why. Actually from its start till now
this foreign foment has accomplished lit
tie depression upon American security
valuations. 1t was insisted in loud proc
lamation before the war started that the
| moment Turkey was put upon retreat
there would be bound to show extraor-
| binary adverse influences upon market
values the world over-for the reason
that Turkey has not only been for dec
AIDES past a tremendous borrower, but
that Turkish borrowings have not been
confined to any particular financial group
Berlin and Paris and London and
Amsterdam having over and over COM
peted to accommodate the ravenous avar-
ice of the Ottoman, while though it has
not hitherto been openly chronicleD
something like two years ago New York
was seduced into the game.
Denial May Be Expected.
This is not much known. Indeed, there
may be expected emphatic official denial
of anything like representation Of what
the extended truth is. 1t was through
Paris that New York became interested
In Constantinople recitations and offers of
commissions. For a time-for long
time-the temptation was rejected; but
about the period that there was a change
in the controlling spirit of the American
State Experimentation the time that
dollar diplomacy" became aggressive
and controlling-the American banker
fell into line. 1t is moderate to intimate
that today 500. 600 of loans are owed
by Turkey to United States lenders.
Now, this has little to do with current
security market conditions-for the rea-
son that current security market condi-
tons are Influenced by, have to DO with,
elemental things far apart from special
transactions Of such sort. 1t Is true that
500, 600 600 is a vast sum. In relative
consideration it is Observation-Disclosures
even by the fact that within the past ten
months upon the New York Stock Ex-
change there have been introduced such
vast volumes Of new security that nobody
is abashed by newspaper announcement
been emitted since New Year.
Movement Suggestive.
This avalanche of new speculative and
investment stuff suggests a lot. What
the veteran observer. unretained upon
either side of the market, is sure to
realize is that they who project and issue
these new securities In such volume and
in such hurry have back of their activity
some well considered influence. 1t Is any
bodys guess what that influence may be.
But what seems generally to be agreed
is that they who issue are issuing in this
haste and vastness for the reason that
they are doubtful II at any time early in
the future they will find such an oppor
tune season as the present.
This does not signify, either. that there
are peculiar or especially attractive ele-
ments in the immediate present situation
for the fact is that even the biggest of
Wall street banking houses are finding
themselves disappointed in answer to in
vestment letters Of invitation.
Public Is Passive.
The public Is very passive. Enthusiasm
it has none. 1t may be fairly claimed
that the rank and file Of important in
vestors throughout the country are not
pessimistic, are not at all inclined to
sympathize with the foolish recitations
so much hippodromed which represent
that all corporations properties are bunko
enterprises, that new securities are neces-
sarily dangerous. Yet what does show,
what is potent, is that the outsider is
disposed to be an onlooker rather than
a participator-iS inclined to watch and
wait.
In conditions like these are to be found
the influences which cOntrol-are beyond
any question dominant-in what may be
regarded as the most important depart
ment and feature Of our current market
notwithstanding the absorption of new
stocks and bonds In the glut Of this
fresh output there must. of course, be
competition with the piled-up volumes
of old issues: and in SO far as the New
York Stock Exchange is concerned the
problem precipitated is whether the old
things which are officially quoted can be
held firm and made to appear attractive
while there Is ranged against them the
competition of waves on waves of new
stocks swelling higher and higher every
day.
When it is stated that a billion of new
stuff has been uttered this year by our
corporations (by corporations allied with
the New York Stock Exchange) only part
Of the Oppressive fact is recited-for, as
is bound soon to be shown, that these
new issues ask not merely to be con-
sidered upon their own merit, but must
be recognized as open and aggressive
competitors with older and lower yielding
securities.
Has New Competitor.
A standard stock paying 5 per cent per
year and entitled to sell at par-upon
past calculations-has now to face a new
competitor offering Z assured and half
of extra In prespect-this return
amounting to more than ~ per cent
in comparison with the old-time standard
of per cent-being backed by banking
names among our proudest. This. you
see, takes out of consideration what
might be scrutinized adversely as a Rob
Roy attraction.
In a word. they who vouch for the new
10 per cent are in the banking world
ranked as high. as conservative. as those
who stand for the old style 5 per cent
are, indeed. of the very same group of
bankers. Is 1t strange. therefore, that
at least uncertainty, IL not weakness.
shows for old favorites?
In the immediate situation there are,
moreover. other elements in variety ope-
rating infiuentially. Wall street got from
Washington. for example. a message
Monday which was neither wanted nor
tod <ha y~;f oI