The sun., 1913-12-29
FINANCIAL REVIEW
OF THE PAST WEEK
Significance Of the Advancing
Strength and Breadth Of
the Stock Market.
POLITICAL FACTORS SEEN
New Possibilities for Business
EndeavOr Now Discernible
in the Prospect.

Securities nave been responding to cer-
| tain definite influences operating more
| readily and directly on the ancial mar.
| kets than on general business and have
| been reflecting conditions TO which quoted
values are more Immediately sensitive
| than are trade and industry. Stocks have
risen sharply and actively for a variety Of
reasons which have combined to provide
| Impulses for purchases not only OF a specu-
latve but Of an investment nature, and a
better inquiry for bonds at improving
prices has coincided with the new phase
! Of the share list. Stock market recovery
after the bottom Of the years decline was
reached last June went further by mid
| September than II has yet been carried
since the autumn relapse and stagnation
but the upward movement has had a good
deal OF breadth and buoyancy. which has
suggested something more than merely
aggressive speculative campaigning by
| professional operators. IT has betokened
not only the belated retreat OF an over
| extended short interest. but repurchases
| for long accounts which had realized to
#, advantage at much higher levels when
all financial centres and countries had
before them as prospect the period OF
credit stringency. capital exhaustion. price
shrinkages. liquidation and commercial
through which the economic world has
been passing.
This period has probably denoted the
acute stage OF more extended process Of
general readjustment than has been COM
monty understood or even suspected. but
| the limits Of such Q period are not easily
determined. How prophetic. therefore,
the December rise in stocks may be Of
| sustained advance In quoted values or OF
early and enduring betterincnt in general
business is Of course conjectural
| The chances are that contraction or de-
preston will continue longer in trade and
industry despite the new tendencies in
! the stock market. just az business activ-
ity and prices were maintained after the
financial markets had not only entered
| into a renewed season Of liquidation but
had made considerable progress therein.
These differences are. however familiar
phenomena. and securities have been GER
tain sooner or later to anticipate a change
for the better In commerce and manufac-
turing.
Political factors have been making the
chief contribution to stock market
strength this month, and domestic poll
tics during the trying times of the last
year has been more an added strain than
fundamental cause of strain. The
amicable arrangement Of political contro-
versies involving the legal lines OF busi-
ness effort and the legal basis OF business
values does not remove fundamental
economic troubles attributable to extrava-
II CANT drafts on capital for wasteful ex-
penditure in public or private ways or
so, ~ e. 70 'epa'. tue ue-
| 49, " f 81 '"N"' ~ VIC ea'Ie
.,o sucn uispos''oh anu arransemehts
nosnic readjustments have approXin,ated
! completion. for politics 10 largely a reflex
Of economic conditions.
An outiook tor poiticsl peace. which is
presunaoi. "hat Iresiaeht wilson had IN
milu tne otner hleht Wheh ne spoke OF the
consttu.,on OF peace IN MS remarks on
sisn,hs tne currency OH. couid De au-
| sp1e1ouS v, uiScoNer! tnat business anu
hhahce hao peen restored 10 fundamental
eouhdhess' proptlous OF more permanent
anu more "idei! dinused prosperity
eventuahy tnan our c.vilization has yet
enjoyed fohticai revolutions. ana we have
been having something OF the sort. usually
20 nanu III mana win economic readJust-
ment' ana they are apt 10 terminate more
or less simultaneously. Prosperity Is not
usually an accompaniment OF political
revolution, ana IS not rkely 10 DC an early
consequence 30 tnat economic anairs al
this 1uncture VIII hardly be characterized
D! suuueh pleasurapie REBOUND from de-
preston and painful experience to more
satisfactory phases
Still II Is permissible to draw optimistic
infcrences. as Wall street has done, from
the normal relation OK politics to economies
and viewing the situation In this light
politics. auhough only partially RESPONSE
BILE for the trials OF the recent past. might
supply the initial impetus to new for
ward economic movement For such a
movement 1t 10 essential that there should
be new enterprise which has been held
more and more in allowance In the past
tweivernonth. not only by the circum'
= stances or the capital and credit markets
but by the adversities Of politics. So far
as the political factor goes new enter
prise would assuredly not lag II ambi'
tious and enterprisng men should see po
htical portents OF that comparative peace
and public understanding which Is indis
pensable to the prosecution OF wealth ere
ating endeavor on an expanding scale.
Discussing the situation more concretel!
and specifically Wall Street has been re-
spending to the achievement Of legisla
tiOn for q new banking and currency