The Washington herald., 1914-01-03
WHEN WALL STREET
GROWS DULL

tCopsrisht. I,li. by C. NJ. Keys. New YORK.
In a dull week in November the trans
actions in stocks on the New York
Stock Exchange were not equal to one
good days business in normal times.
The week was the dullest in about fifteen
years On Monday of the following week
a new low record in transactions was
made for a period of sixteen years, OF
since the quiet days that followed the
panic of 1sg5.
Such dismal duIlness has many causes
and many effects The main cause of II
is, of course. public apathy to the op-
erations OF speculative markets, COM
bined with a desire, on the part of the
large professional spectators, to find Out
where they stand before beginning any
extensive movement either upward OF
downward. The public apathy is un-
doubtedly due to worldwide conditions.
including the conservation OF capital for
future financial needs and a general
let-up in commercial business throughout
the world. 1t is not, however. with the
causes OF the prevailing dullness that this
article intends to deal
One of the immediate effects of such
condition is to intensity the pessimism
of men doing business in securities When
man who has very extensive Office
and a large stan of clerks sums up the
weeks business and finds that his gross
commissions amounted to Sl2 and that
his gross expenses amounted to nearly
500. II puts him into a frame OF mind
conductive TO dismal thoughts and fore
bodings. Perhaps he has felt right along
that some day business will revive and
things will be all right in his business.
but a week or two with results like that
oh II ind he
ton whether speculative business Will
ever come back. and if so, whether he
Nill be able to survive long enough TO
welcome II when IL comes
On the Monday following this very dull
week class of young men met at the
financial lecture of a university extern
sion course in New York. These men
were almost all employed in. or partners
in, Wall Street houses. The proper sub
ject for the lecture was far removed
from the stock market; but at the be-
ginning of the lecture one of the stu
dents came TO the lecturer and stated
that there was a universal desire in the
class to have him discuss the question
whether a broad speculative market
would return to Wall Street, and if so
when II would return. The lecture de-
veIoped into a general talk in which it
transpired that in nearly every house
represented by this class this topic had
been the prevailing topic of conversation
for a week past. and that in a good per-
Centage of the houses there was senti-
ment amounting to a conviction. that
the great age OF speculation is past for
good. and that the public will never
again carry on operations IN Wall Street
similar to those of the last ten years.
Sr,,.h dadncfinn N t,at
ural enough under the circumstances,
la cks economic foundation. for one who
studies the matter knows that great out
bursts Of speculation take place only at
times when the general commercial, in
dustrial. transportation and financial
temper of the country tends toward ac-
tivity. When manufacturers are afraid
to venture further money into their fac
tories, railroad men fear to build exten-
sions, merchants refuse to stock up with
their full lines of goods. and financial
leaders hesitate to commit their houses
to large undertakings, the temper and
spirit of the country make broad specu-
lation impossible. Men hesitate and
wait a long time before taking chances
in the markets with money of any sort
whatever. The investor does not sell out
because he has no other use for his
money. Therefore. no great liquidation
goes on and the Wall Street community
gains no commissions even from the
selling end Everything drops into a
waiting attitude and dullness comes upon
the market place.
From the investors point of view. dull
ness may not be a very bad thing On
course. there Is always a tendency to
drift downward in prices during period
Of lethargy in the market This Is true
Of stocks as well as of bonds: but the
main difference between the two is that
while bonds are dealt in generally for
cash, the bulk of the stock business Is
margin business. Sometimes, therefore.
A period of very dun general business re-
suits in the piling up of large sums of
money Of a conservative sort which
sooner or later seek a proper return to
the bond market, and old-fashioned
houses dealing in standard bonds and
high-grade investment securities of all
sorts find steady flow Of money seek
ng investment in these conservative
channels That Is why, as a rule. the
bond market generally leads Wall Street
put of a period of dullness-
The buying of small lots Of stock by
investors for cash is another
trade that frequently grows quite. i'm
portant toward the end Of period Of
iullness in the market. This Is also true
Investment just as much as the buying
,f bonds. The unwillingness to go