The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-26
FINANCIAL REVIEW
OF The PAST WEEK
Encouragement to Optimism
Derived From Presidents
Message.
MONEY EASE A BIG FACTOR
Success Of State Bond Sale
Hclps-StOcks Strong
in Wall Street.
MONEY EASE A BIG FACTOR

| It is not hard 10 single out the in
| uences which contributed to the outburst
OF strength and activity In the stock
| market last week. II would be harder
to estimate their proper bearing on the
general business and financial outlook of
| the next few months. II the glamour of
| sudden sunshine cast over the immediate
| situation by the impression derived from
| President Wilson's fashion OF announcing
| a further radical programme OF legisla-
| ton were chiefly what has affected Wall
street 1t could DO assumed that contact
with facts later on would dispel Illusions
about the early achievement of "A restored
prosperity throughout the country. Sum
shine and glamour We're not. however. all
that caused the expansion OF the stock
market following tho rise which had been
In progress since the middle of last month
In very large part indeed the latest
phenomena OF the share list constituted a
tribute to the power OF sentiment ard
demonstrated anew the old lesson that
psychological factors have TO be included
with physical factors in the reckoning of
values. Conditions had become ripe for
ACCOMPLISHMENTS to optimism which nigh;
well as from the money and investment
markets. or from the state OF trade and
industry. and the general construction
promptly placed on President Wilson'S
communication to Congress respecting the
enactment of new laws Tor the extension
or Government control over business into
fields hitherto unoccupied by regulating
authority gave IA tremendous accelerating
impetus TO movement of quoted values
LEO. a a.
be a mistake 10 overlook the part played
by the domestic and foreign exhibition OF
increasing ease in money and by the adj
Nertisemont of vastly improved invest
inent demand which tho expcctcdly
great success of the New York State bond
sale gave TO the financial and business
community. The facts about money and
about the investment attitude furnished "A
solid basis OF support for the structure OF
prices which Wall Street proceeded to
raise. They provide, moreover. valid reasons
Tor maintaining a reasonable degree Of
confidence toward the years prospect as
"A whole II the principal events OF 1914
of economic bearing are lot otherwise
unfavorable.
There is no necessity here to 10 over
again the arguments made In past weeks in
behaii of the contention that "A bad cor
ner was turned In the world -. finance
during 1913 and that II patience and
foriitude were displayed there .hould bc
some evidence before the cnl ~ the pres
eht year that the world was. Engaged IN "A
new forward economic movement. 1t has
been pointed out before this that signs OF
change FOR the better were bound - show
themselves first in the financial markets
and these signs have bean appearing
Securities had been placed In Il position
Of great technical strength by wide
spread liquidation of holdings AMI com
mitments and We're in shape To respond
10 cncouragements supplied by he world
wide lessenng ~ tension AMI strain i'm
the credit market II hopes are not
raised too high by what has been occur
ring this month 1t is likely that in the
course of time further RET SONS will APP
pear for enlarging ihe loundirics OF
optimistic expectations.
At the moment recklcssnt So rather than
sagacity would be eyinCed in anticipating
early r,coveries OF trade and industrial
volumes as we'll margins OF profit
simply because the Wall Street rccoil from
extreme and excessive depression had
Il, en- carried along with a H'ed, deal OF
eNuberanCe. Wall Street enthusiasm may
hay" to b. modified later on. precisely be-
cause Of the discovery thar the business
REIMBURSEMENT has NOT been as ff,ctua:ly
completed az has the rsadjustmct.t ~
hldIt'. III aullllpfi "a revelation Is 'lill
needed respecting the suiilCicncy of capi-
tai supplies for long time borrowing as
contrastcd with the pictiorl o. money
available for temporary aCComm Jdat.un.
The aSpeO; OF abundance wash tic G. dit
market now wears both at hpmn and
abroad is owing to the seas nal 'ull in
business plus the depression in business
which a period Of economic reaction has
nece ssitated. Such ease can last as long
"a I1GinaGs 20 h..In
normal. and II under such circumstances
resort Is had 20 the credit market To ac-
commodate capital borrowers, as. for ex-
ample. through the sale Of public AMI
corporate short term note ISSUES, the early
revival of business borrowing might DO
decidedly incOnvenlent.
So far as concerns the state of capital
supplies there is no doubt that some re-
filling OF the reservoirs has gone ON. but
tins has been chiefly through the release
OF capital hy liquidation. Such "A release
cannot be made 10 meet the demands for
new capital for the purposes ~ new en-
torprisc TO any thing like the amount ind!-
Gated by the waiting attitude 90 bog-
IoNers all over the world Accommodations
~ new capital come from economy and
THRIFT and II takes time for much capital |
10 be saved. On the whole il would not |
uc surprising TO lind after II while that |
the Wall Street stock market had gone |
900 Tar ahead OF the country IN its recov-
cry just as il went too far ahead of tho |
country IN It's decline. Some OF the fore
going considerations Apply very forcibly
I" the further lowering Of interest and |
discount rates last week. CAN money |
declined in Wall Street TO a renewal rate |
OF ~, per cent, and il Is to be observed |
That France took $2,oOo.oOO more sold in |
the face Of failing for.isu exchange and |
falling ioregn discounts. There Is cer- |
tain warning indication In the evident !
probability Of continuing gold exports !
that the financial rcadjustnent has no, I,
been concluded in Europe, bu, for the
the thoughts of men OF affairs
nr" likely to be shaped by the downward
,r,nd Of money rates
MI oyer Europe to-day discounts range |,
'lom ! to . per cent, averaging around |
ana below I u per cent, as compared with |
an average of ! 10 q per cent. "A relatively !
few weeks ago The Bank of Engiand's |
,c'ond reduction this month was n signal |
for II reduction of rates at a half dozen |
financial capitals, and II was clear from !
the Bank OF EnslanI's return. az from ,