Evening star., 1914-08-02
STOCKS HARD HIT
j. BY FEAR OF WAR
Average Drop Of Three and
One-HaIf Points When Hos
tiIities Began.
OVER MILLION SHARES
TRADED IN ON TUESDAY
General European Conflict Would Be
Greatest Calamity World Has Ever
Suffered, Says W. S. Cousins.


NEW YORK, August lit is always
possible, under ordinary circumstances
and in times of national and interna-
,ional tranquility to estimate the pros
poets for prosperity by the tangible evil
dences that are capable of Interpretation
even to the laynen. Thus. when bumper
harvests are not only promised. but ac-
tually produced, when money is abundant
and loaning rates comparatively low,
when the prospect Of q better under
standing between business men and leg1s-
lators has become much more apparent,
it is logical to conclude that such COM
bination will insure an era of business
prosperity and national plenty. There is
one influence, however, that will COM
pletely shatter the most accurate and
positive calculations. and produce chaos
and panic In the face of the most favor
able circumstances. This terrible infiu-
ence is that Of International war. the ef-
fects of which, under twentieth century
conditions. would no doubt be the great
est calamity that the world has ever suf-
fered
The war clouds that have been gather
ing over continental Europe In the week
past broke with disastrous consequences
Tuesday of this week. shattering and
demoralizing not only the financial mar
kets of Europe. but of America as we'll.
1t had been said of New York that this
was the only stock market in the world
that was not in state OF panic in the
week ending July 25. In the face Of a
war scare that threatened to assume
l.a~ he Nov
stood firm and was displayed in an ad-
vancing right up to its close Saturday
last. This was the only market that
could boast of easy money and free gold
in abundance. 1t was as splendid an
evidence of the soundness of underlying
conditions in this country as has ever
been given. The war scare which ush-
cred in such chaotic conditions in the
stock markets of London, Paris, Berlin
and Vienna bore all the marks that char
acterize such catastrophe. All the Sc
curities of European banks and govern
ments were weak. British consols declin-
ing in the general tumble. In Berlin the
Industrial shares were almost unstable.
many of the stocks breaking from to
Is points. st. Petersburg International
Bank stock lost % points, the Russian
Bank of Foreign Trade 16 points: Turk
ish bonds from 10 to 10 points; Turkish
tobacco shares IA points and Rio Tinto
an Introduction to what was to follow.
Had Hoped for Peace.
Until the very minute that war was de-
clared against servia by Austria, Tues
day at noon. highest hopes had been en-
tertained that a peaceful solution of the
many refused to join the ambassadorial
peace conference in London, however.
the enormity of the tragic possibilities
was realized. and then American finan-
cial markets for the first time gave way
to alarm and panic. 1t m0st be said, in
fairness to American traders, that this
condition was the result of the wholesale
unloading of securities by the European
traders rather than Of apprehension by
investors in the home markets. The bulk
of stock trading in the New York mar
ket Tuesday was enormous, reaching the
total of 1,0S3,O00 shares. most of which
changed hands in the afternoon session.
Among the immediate effects of the
declaration Of war We may note the fol-
lowing: Stocks dropped an average Of
81 points. Canadian Pacific losing nine
teen points in one session; wheat ad-
vanced 10 cents. bushel in Chicago. and
correspondingly in Kansas City. Duluth
and Minneapolis; corn advanced from
to cents a bushel: cotton declined 81 so
bale; $13, 600. 600 additional gold was en-
gagged for export. making $o4 100000 in
TWO days; insurance on gold shipments
rose from $500 to 81 800 per 81. 600 90: for
eign exchange (where quotations could be
had) rose to 4,9o for demand sterling and
4.95 for cables; copper. silk and conee
dropped. tin and steel advanced. On the
whole, American markets were orderly
by comparison with the action of conti-
mental bourses and even the London
stock Exchange. The Berlin bourse was
In fact. the only continental market that
DID not close in an uproar, while Paris
and Beriin overwhelmed London with
selling orders. and caused such excite
ment that many members of the London
exchange were in favor of closing that
organization to prevent utter chaos. The
Montreal and Toronto exchanges closed
when the extreme decline OF Canadian
Pacific was realized. Money rates in
New York. while stronger. were onIv
fractionally advanced. The demand for
money here Is comparatively light. and
lenders are inclined to husband their re-
sources rather than to put them out at
present quotations. Bankers are now of
tne opinion that the present excitement
wiz prove but temporary, though
somewhat serious, furry
Securities, Trade and Crops.
From figures compiled by Dow, Jones
& Co. 1t appears that there are In de-
rauit at the present time 1851. 600 ono Of
railroad securities IN this country
larger total than has before existed at
one time since the panic Of 1893. II the
prospects Of further defaults before tbe
close OF this year are realized the total
VIII De increased by at least S12 600 OOO
more. The ST. Louis and San Francisco
heads the list of non-interest having
Ialiroads with total of Sl95, ,OOOOO1 az
defaulted bonds and notes. Its former
SUBSIDIARY, the Chicago and Eastern JjIi-
nois. has S25,0o0.Op0 more not included j.,
the Frisco's total. The Chicago. Rock
Island and Pacific Railroad Comnany
formed to hold stock in the operatine
company. has not paid interest due Nav
on It's 600 of collateral As while
.he Pere Marquette has failed In nav
ments on $So,OOoO0O of securities and is
expected to default on S11. 900, 900 mors
py order or the courts. The Wabash
rlttsourgh Terminal pays nothing on
sooooo.OcO of securities, while the Wa
pasn mas defaulted on $4z,OOOOOO.
Trade and crop reports are stiIl very
satisfactory. and are Indicative OF er-
paholng business all along the line, Thi.
especially true of the steel trade in
which gradual betterment has been
,toted since July /. Dispatches from
flttsourgh are to the effect that orders
ior steel products have increased ar a
satisfactory rate. and that Operations