The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-04-15
The Sustained Rise In Stocks.

The dominant feature of our business situation
lately has been the great and sustained strength
shown in the stock market. This is cause of
mystery to many people. Why, they ask, is the
stock market advancing when general business is
still poore Why is it that investors spectators
are buying securities, when the properties repre-
scented by these securities still making less
money, even if they are making any money at all,
than they did in former years: Railroad earnings
in the eastern part of the country perhaps
showing some improvement but they are showing
little Improvement in the West. and reports of idle
cars owned by the railway companies whole
still have to be put in large figures Returns from
both retail and wholesale trade centers are but
slightly more encouraging than they have been
for many months past Why then is there any
rush to buy stocks?
Questions of this character are very often
asked by the general public when move either
in upward downward direction, takes place
in the security market which is apparently not
warranted by the actual business conditions Of
the moment 1t not infrequently happens that
prices of securities which have been sustained for
months and years in boom periods by I'M
failing public buying suddenly display fundamental
weakness at time when the business situation is,
on the face of things, good as it ever The
remark is then commonly heard that wall Street
is the only blue spot in the country, and that
bear spectators" have set out to smash stocks
out OF pure righteousness or by main force
whose application was most unJustlhcd. But it is
invariably found after sufficient amount OF time
clapscS that if the decline in prices goes very far
and is interrupted by strong rallying tendency
there is some good cause for it. 1t is also found,
usually that the business situation is not sound
as il previously looked to be and that seeming
great prosperity in fact hollow.
1t is the peculiar function of Wall Street, the
place in the country where tho widest market for
securities exists, to make up its mind concerning
the future and to "discount' either improving
deeriorating business conditions, as the case may
be. Its judgment concerning this matter when cN-
pressed in such sturdy unmistakabIe form as it has
been in recent weeks, is almost infable. This is
because Wall Street is merely point upon which
convergcS the judgment OF the entire financial COM
lnunty Its verdict is the net result of the COM
bincd financial forces of the community Some of
these forces make for higher prices; some for
lower prices. One business is good, another bad
One railroad is the point OF bankruptcy, another
is making money. Ono great banking house is
convinced that trouble will come as the result OF
the European war, another banking house is
tain that the greatest trouble from this particular
source has already been felt All these myriad inn
pulses, assisted by the power OF subtle and unseen
information express themselves in the stock mar
kct; and the movement OF the market is determined
by the impetus arising from the net balance of
forces thus represented.
Such stock market VIC have seen in recent
weeks tesihcs in the clcarest possible that
the weight OF Intelligent sentiment in tho United
States is to the effect that better times in store
for our country. 1t may be said that this weight
OF sentiment really amounts to than guess
work and expresses more hope than anything else.
Be this as it may and recognizing fully the fact
that the judgment expressed is often impossible
OF analysis or positive proof the fact is that in
nncty-nine out OF hundred the event proves
it to be correct.
The Herald proposes to discuss in this column
tomorrow OF the tangible causes for the
present very apparent optimism among observing
investors.