The Washington herald., 1913-12-20

porary uses, like commercial paper for
instance, figuring that it would be bet
ter to keep a large amount Of resources
ir this liquid form for fear something
important might turn up which would
need ready money. In other words, tho
big investors of the country have been
getting ready to Oe bargain-hunters on
a gigantic scale. If the occasion occurs
These men, the best educated anil
trained investors in the country, are buy
ing quickly whenever they can do so a.
rates that seem to them to be good
Their orders stand in the listed market
fellow the quotations of month or sn
ago and these orders are gradually being
filled as offerings come in. When new
hlGh-grade bonds come out into the mar
let. the big waiting investors make UP
their minds quickly whether they want
them or not, and act very quickly once
their minds are made up. 1t is this
cautious waiting capital that accounts
for sudden disappearance of these bis
blocks Of good securities even in very
dull and quiet market
The average investor, who is neither a
trustee nor a very rich man, has also
been waiting, but he has not had the
same definite idea of what he has been
waiting for that the bigger men have
had. Therefore, he is passing by the op-
rLrtunities that the big men are seiz-
ing and the result will probably be that
the average man will still have his
money and will be waiting after the pro-
fessional investor has done his buying at
lew prices ard when bargains no longer
prevail.
There do not seem to be very many
signs of a big boom in bonds or in stocks.
Conditions would seem to indicate on their
surface that there will be neither much
further depression nor much sudden up
rise in prices. There probably will be a
period of quiet trading. just as there has
been for the last three or four months,
in which the wise investor will look
around for bargains that suit his taste
and his purse and ind them. The average
prices of good bonds are today almost
exactly what they were three months ago
and the same process of quiet absorption
by professional buyers is going on today
as it has been going on during the whole
OF that period. In other words, the bar
gain basis was probably reached, some
months ago and has continued ever since.
and it would seem reasonable to expect
that before many months the demands for
investments by waiting capital will find a
scarcity of securities. and that the gen.
eral level of bids for standard bonds will
rise rather than decline.
II is safer to estimate the movement of
prices in bonds than it is to estimate the
movement of prices in stocks. for bonds,
after all, ebb and flow in price simply
according to the SUPPLY Of money avail
able for investment. stocks, on the con-
trary. ebb and flow only partly on that
account and the test of motive power in
the stock market is supplied by accidents.
Incidents, news, and sentiments. No mat
ter how blue a man may feel, he will not
long allow sums of money to lie idle with
out making IL earn a fair rate of interest,
but he will hesitate a very long time be-
fore he will buy stocks IL he thinks con-
ditions are had. There are certain def
mite indices in the supply Of money. Every
one knows that as business contracts
money piles up; and that as the big busi-
ness and commercial movement OF crops.
&C.. to market ceases, more and more
money s.released. Therefore. 1t is not
dificult Rfgure that the supply of avail
able monty Is likely to increase from now
on rather than to diminish. and that,
therefore, the greatest impulse OF all to-
ward a broader bond market seems rea-
sonably likely to be filled. How far II
will go. or how broad il will be, Is guess
work: but the existence OF the impulse
itself Is a clear deduction from known
facts. That deduction at the present time
seems clearly in favor OF a broader and
better market for high-grade investment
securities.