The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-26

~ was INC SITUATION IN this regard
which induced Robert Mason, sub-man-
aker OF the Credit Lyonnais. to speak rs
follows ut the dinner Of the New York
! state Bankers Association last Monday
night. after enumerating the aggregate
OF European treasury bonds and short
| term notes OF American origin falling
, due within the next 1--WE years: III we
| remember THAT our total Of require
nents supplied no ready money for any
| government and made no provision for
European private companies. the rail.
| road and public utilities IL we bear In
| mind that political motives now consti-
tute an important factor in financial deal
| ihgs and that all great international mar
kets have at present n rather natural
| tendency to give precedence to the stisfac-
tion or their own needs, We are
, bound to conclude that the greatest eau
| ton is advisable In the present clrcum-
stances and that all borrowers should be
| directed to reduce their calls upon the
| investor to minimum"
This foreign view OF affairs strikes a
rather different note from that which wo
| have heard in the last few days. but the
european point of view may we'll
! serve to qualify some of the opinions
which have been based here on the posi-
ton In money and OH the investment
| success of the New York State sale OF
| S5l 100000 of Al per cent. bonds. This
bond offering was more than five times
subscribed and the price received was
| much higher than had been conjecttred
when the Offering was first announced, a
| month or so ago Naturally enough, in
recollection of the past occasions, when
II period of financial and business dcpr,s-
sion seemed to have been terminated By
the conspicuous success of a public or
corporate bond sale the results obtained
by New York state last Wednesday gave
a further impulse to the expression OF OPP
timistic sentiment through the Wall Street
share list. Yet il might be said
In reference to the state bond sale that
the security was of the very highest
grade; that the Government IL par
tiCularly favored borrower nowadays
when the income tax is novel. and that
the cost To the State. denoted by the yield
OF little less than Al, per cent. on
the sale price. was, all things considered.
fairly high. Furthermore the amount Of
money involved in the aggregat. of the
subscription did not by any means prove
how much money was really available for
long time investment Most OF the bids
came from financial institutions and
bond dealers. and a large duplication of
FUNDS was involved In the subscriptious
Having made these cautlonarY observa-
tons II * proper to say that the cir
cumstances of the Investment market rs
Indicated by the state bond sale are more
promising for the retinancing. refunding
and new financing which must be done
ny pubic and corporate borrowers
than could have been imagined not long
since. They bear eloquent testimony 10
the conpulsion which money always feels
to seek employment when there IL any
th.ug like n plethora OF money, no matter
what the doubts and fears OF the recent
past may have been or the uncertainties
OF the future may be. 1t is more than
anything else the appearance OF money
In .pDiDfiG SUNNY fn-Iay
and active inquiry FOR bonds which has
developed that warrants the preserya-
ton OF sturdy belief that u destructive
era in the economic cycle has been closed
and that constructive period has opened
III the investment market shows a large
capacity for the absorption OF securities
sold TO take care of the capital require
ments or public and private enterprise
not many months will elapse before the
worlds trade and industry begin TO e,ir
with new life.
Analysts OF the political factor In the
situation and prospect Is more difficult
than analysis Of the money market. The
reception accorded to President Wilson's
declaration that the antagonism between
business and Government was ended
showed that he had uttered a happy phrase
n the right time The Presidents mes
sage on the subject of legislation to
increase the element OF Government regu-
''i'h piG buslHcss Couiu
distinctly into lis manner and its matter
The specific recommendations OF the mes
sage showed no abatement Of radical pur-
pose The legislation proposed In the
new bills which are appearing In Con-
gress as Administration measures for
the abolition OF interviewing directorates
the definition of unlawful restraints OF
trade the supervision OF competition IN
prices and all the other phases OF bust
ness which have been made political is
sues Is drastic. II carries along the
policy which now seems so popular o!
permitting the ownership OF private prop
erty without apparent change. but (,
seeks more than ever 10 make u clear
that the prerogatives OF ownership in the
use and control of property are TO be
politically diminished. II adds TO the
test which business must undergo when
1t seeks 10 recover under the operations
OF the revised tariff and tho revolut,onized
banking and currency system. and It does
not obviously contrhut. fresh incentives
20 the Inauguration of new enterprise on
large scale until il can he seen how
the experiment OF the new lawmaliing
works out.
St.n the dominant American mood OF
the moment Is To- ignore the matter Of the
rest Of IN. Administrations programme
and Ia take inspiration from the excellent
tone ~ President Wilson's latest address
The prevalence of this mood seems to be
clear from tie phenomena OF the stock
market. Wall street itself was not a little
astonlshed last week at the unrcmtting
strength which the share lis; displayed.
Professional opinion was confused. be-
cause apparently II was dealing with a
market that was less professional than
any market for perhaps two years or
more. II not further back than that. II
was Il market which presented symptoms
OF growing public participation IN the
pun has" OF securities. encouraged by the
feeling which President Wilson had dir
fused through the land that prosperity
was ON It's way. Whether or not advan-
tagc was being taken Of this mood 10 con-
duet important operations in stocks was
con Jecturdl. but II would be in the logic !
IF Tho market situation 80 well as in the !
logic Of new legislation !f "A large shifting
Of security holdings were under way. The /
return Of the investor has not been the |
only feature of the dealings in corporate /
shares lately and speculative effort has |
been more than implied in some Of the !
phenomena witnessed. That this is we'll
timed car hardly h' doubted but the ex- I
tInctiun % large dormant short interest
and manipulation of the London option F.
market necessarily detract somew hat from |
the general significance OF the price move
lncnt and the trading.
Yet the disposition OF Wall Street TO
work for higher prices" probably reflects !
the disposition of the country to try to |
20 ahead now on the basis OF cheaper