Evening star., 1914-11-08

that confidence In the better grade of
bonds has been re-established and Is
growing stronger each day BOND ap-
sorption has been Of discriminating
nature, showing conclusively that the
demand has been chiefly for invest
ments providing absolute safety OF
principal, with the income return
secondary consideration.
If Bonds, Why Not StocksP
The point has been raised that If the
selling of bonds can be accomplished
on so large and so satisfactory basis.
why could not the same process be
effected in stocks, either listed or un-
listed, either dividend or non-dtvidend!
All kinds and every description Of in
yestment securities are subjected to
identical conditions SO far as they are
affected by the European conflict and
the fear of European liquidation.
American bonds are held abroad as IN
vestments by foreign investors ana oy
estates to perhaps as large an extent as
stocks, but there has apparently been
no concerted movement for dumping
the bonds on this side OF the Atianlc.
Furthermore. If the plan for trading In
bonds under regulation by special
committee is SO successful as to pro-
duce business in the amount OF more
than one million dollars per Gay. ~ ls
able results can be produced in other
fields of investment.
should the exchange governors not
embrace the opportunity that lies open
to them in this respect. those who de-
sire to buy and sell stocks must be
driven in larger numbers to the curb
and gutter markets. where In some
instances the genuineness OF the Sc
curities dealt in is open to question
Moreover, since the outside" market
is one where necessitous sellers are
in the majority. forced selling In the
absence of reasonable demand must be
indulged in, causing shrinkage In
prices all out of proportion to the
value of the stock traded In. The
controller of the currency has already
taken cognizance Of the frregularity
Of this so-called market, and has Is
sued an order instructing national bank
examiners to accept the July 80 quo
tations as the basis for collateral valu-
alton on national bank loans. This is
a keen reputation of the curb, but
it provides no substitute. and this IS
without question the immediate duty
of the exchange governors
Stock Exchange Situation.
Naturally the announcement of the
British government outlining plan
for the reopening Of the London Stock
Exchange was received with peculiar
interest on this side of the water, since
IL fS not only OcSlIdOl0 pul iAupCA aliSS
that the New York and London mar
kets should open simultaneously, If at
all possible. In brief, the London plan
calls for an extension Of speculative
loans for one year after peace has
been declared, the borrower to furnish
a per cent margin on the highest
grade stocks and 10 per cent margin
on other securities, and to pay interest
fortnightly. Even in conservative
circles 1t is expected that this scheme
Wi SnccpSSfnlly- Naw York iS
highly desirous of allowing London to
take the initial steps. since that would
afford d good test of what may be eX-
pected in New York in respect to the
liquidation of American securities. So
far New York is concerned, there
seems slight probability of any trad
ing of an unrestricted character for
some time to come. The exchange COM
mittee is evidently insisting upon a
complete guaranty against over
wheining foreign sales before it will
give the signal for unrestricted trad
ing
Compared with month ago. there are
evidences of a vast improvement in bank
ing sentiment There is more disposition
TO be cheerful about the outlook. although
tAsre appears to be tendency to be
more or less guarded in estimating future
possibilities.
Bankers are generally looking for easier
money conditions in the near future, some
going so far as to predict per cent
or Az per cent money. This may be
Lrought about by the accumulation of
funds caused by the shrinkage in busi-
ness and the intensive economies being
practiced by all corporations and indi-
viduals. The best indication that bank
ers have the money situation in better
hand is indicated by the loan made to
France, which would hardly have been
entered into unless the banks were in a
position to successfully take care Of their
commercial and other requirements.
Preparing for Trade Expansion.
There is a growing assurance that all
present difficulties that block or delay the
expansion of foreign trade will soon be
removed. and that in consequence there
will be a general revival of business. With
the recent action of the British govern
merit cotton is beginning to move freely,
and this single export alone will remove
the adverse balance of trade. American
exports, however, will not be confined to
cotton. but extended to other commodI-
ties. SO that the normal current Of foreign
trade will soon be to a large extent re-
sumed
OF necessity, the free movement Of
cotton to the belligerent countries is a
great relief to the south. Prior to this
resumption of the cotton trade the manu-
featuring industries of Great Britain and
France were in serious plight, but this
condition will now be entirely changed.
Although all German ports are closed
carRoeS may De Snlppeu Dy way OF f1Oi-
land, Italy and Denmark. and from these
countries cotton shipments may be made
to German points. OF course. this state
ment presupposes that the shipments are
kept free from any mixture of contraband
goods.
II may be added that German exports
are also reaching the United States In
large quantities. These goods include dye
stuffs. chemicals, chinaware and toys. This
trade is mainly carried on through Hol-
land. and fourteen large steamers have
been chartered by the Dutch company to
handle this trafic.
Shipments to European Ports.
American exports Of foodstuffs and
large quantities of army supplies are
being shipped to European ports. These
shipments. which are made to Great
Britain and France, are at the risk