Daily capital journal. (Salem, Oregon) 1903-1919, 1915-05-13
Stock Market Receives Shock
From Sinking of Lusitania

New York, May s, 1918,
The market received bad shock
from news of sinking Of the Lusitauia
Prices broke aeavily in the war group,
and for time a panic seemed immi
nent. There was a rush tu sell long
stoehs, especially in shares which led
the recent rise. In the better class of
securities, however, the fall was less
serious, and more or less support was
afforded. The close was better than
might have been expected Confidence
has naturally been badly shaken by
TINS disaster, the outcome of which up.
ON public opinion il is vet too early TO
forecast Much depends upon the self.
control which the American people dis.
play. Thus far under the strong lead
OF Pr&ident Wilson the country has
taken Things calmly and kept its head.
II is to be hoped that this spirit will
continue, and that our people will not
unduly embarrasS the administration hv
their resentment spirit. The remarks :
which follow were written before the
disaster to the Lusitania, and must bc
accepted accordingly.
After the recent advance in values
the market was ripe for a reaction.
h6alizations had weakened the situa.
ton, and induced large operators 60 en-.
courage lower prices. Current events
aist proved that war is still the domi.
mating influence. This is especially
true of foreign trade, and largely true
Of domestic trade, Notwithstanding the
ilash OF temporary prosperity caused
ny war contracts. The money md
credit situation in its relation TO tnc
war should be closely watched. In the
n'ne months since the war began, the
principal helligerents have issued near,
" SlO,OOO,O00000 in lmns. This prodi.
flous Wasiage must so ON while the war
lasts, the intensity aud bitterness of
the struggle indicating that it cannot
he ended until the resources of some OF
the contestants are exhausted, and 9th
ers seriously impaired. Tacsc conditions
are not yet in sight. OF course, trad,
is gong ON IN the bclligercnt countrie,
10 q very considerable though lcssencd
| degree; ami the curtalcd demand roI
credit on this account has matcriall,
Mdcd foreign governments in raising
these vast sums which could hardly bt
obtalned from current national savings
little foreign capital is going into new
enterprises, and this toe makes if rasicl
to provide resources for the contrs
tants' New York today is practically
the leading international aud monetary
center, and may remain SO until the wal
closes Many millions Of American
money have already been invested il
foreign securities and continuance Of
TINS movement must be anlicipatcd
/ Onr own nomo Investments have ais,
been very considerable Of late, mrmd
ing as they do large borrowings or cx
tensions, such as those bv New Yorl
state, New York Central, New York
New Haven a Hartford, Missouri. Kan
sas u Texas, Baltimore & Ohio, nm.
other issues. The PENNSYLVANIA has ms
announced n new issue of $4,000 600
largely for the purpose Of taking nj
maturing obligations. These devotion
ments are proof of very satisfactory in
veslmcnt cOnditiWs in the lInitp
states; for in ADDITION to the grea
W ~ 'NH'lo hANl llUlllU, llllN mn
ket absorbed with astonishing ease
large amount Of American securities re-
turned from abroad; all OF which mean.
taat the United States is getting on.
Of debt at Ia very favorable opportunity
The new security issues announced II
April amounted to $lj3,OO0.OO0, com
pared with SjIOOOOOO in March nm,
! Fl53OOo,OO0 year ago, These figure,
were, Of course, much swclIcd by th,
New York Central and Baltimore 4
ONO issues, but they do not include the
large sums negotiated or being ncga
tlatcd on Canadian, Argentine, French
and other foreign accounts. When al
/ Of these are taken into consideration
| IT wlll be found that the United State.
has shown remarkable investing power
Notwithstanding the dulucss Of general
business for the past year e. two. Be
yond question popular cxtuvagancc ha,