The Washington herald., 1912-11-09
THE Investor
IN 4 War SCARE
Copyright. 1912. by c. NJ. Keys. New
York;

tCopyr1Gnt, lslE, by T. VI. heys, New
York;
We have had a first class war scare
in Wall Street. We have apparently
passed it without any very serious dam
age being done. In the course OF two
or three days, at the acutest stage OF
the scare. all the stocks and bonds that
have an international market. that is
securities dealt in both here and abroad
suffered little reactions. The most acute
break OF all was in Canadian Pacific
which Is a stock dealt in on the Ber-
lin market perhaps more than in New
York. Then at the first sign OF the
passing Of the fright everything rallied
back and things went on as before.
1t would appear from this simple recoI u
that war scares have no terrors for the
investor. Yet it is hardly true. In the
United States We are so self-centered
in the matters of moEey and investments
that We do not know anything about
what happened abroad and there are SO
few real International securities in our
list that the record of prices in our own
market does not show worldwide dis
turbances with anything like the same
clearness with which such a disturbance
is revealed in foreign markets. Therefore,
in order to get a real look at this war
scare and what IL gave to the investor
In the world at large. it is better to
supplement the brief review of our own
market with q glance at foreign mar
kets to see what they did In the crises.
In Paris they have a market that deals
in securities from all the world. Ever
since last summer they have been car
rying on an active speculatio in indus
trial stocks and bonds representing Rus
sian businesses. There Is a market in
St. Peterburg but it is a small one and
stocks and bonds was In Paris. The
speculation had been rather Wild and the
stock buying people Of the country were
pretty well loaded up with these for
eign securities.
The result was that when the crisis
became acute. there was q mad rush to
sell. The Russian industrials became
practically unsaleable and the prices
dropped heavily. consequently the people
had to sell other securities to protect
themselves. Bonds Of the countries in
volved in the war suffered a precipitous
tumble. The bonds OF Montenegro de-
clined fifteen points in a single day. The
French government bonds touched a new
law record. T0 stocks Of the leading
French banks and credit associations
showed sensational declines.
The Paris market dumped into the
London market whatever that market
WOulu t4ke, mostly copper STOCKS ana
standard American securities.
Berlin was not quite so bad, but even
in that market in one day bank and
Industrial stocks dropped two or three
roints and speculative issues of all sorts
declined six or seven points. There was
particularly heavy selling in Canadian
Pacific. Here We find that the reason
for sharp declines in that stock in the
New York. market for It is a truly in
ternationaI stock.
The London market kept its head re-
markably well. but II was obliged to
take heavy selling from the other Euro
lean markets In whatever securities
these other markets had which Lon
don handle. consequently the London
reople. dealers and professional traders,
In order to be able to buy the conti-
mental securities. sold American stock.
and 1t is figured conservatively that In
the course of ten days or so something
like 900 Of American securities were
sold in the United States by London deal
ers. II was the pressure Of this stock
and these bonds that led to our brief
collapse in New York.
Here one may trace the circle caused