The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-01-11

premises IN order to make pleasing de-
auctions. There are some things which
have to be kept strait ht II the stock Ex-
change Is not to go wrong. We have es-
tablished a good deal OF independence OF
foreis en- sdNersltes. especially In compari-
on with last autumn. Furthermore some
effective Offsets to the foreign situation
have been furnished by the business. both
commercial and financial. which the war
'As brought to us but we have to remem-
>cr that Europe has = large control OF
pur resources through billions OF dollars
of holdings OF American securities. We
will probably have to see to Il that IA
'.lities are afforded for accommodating
UGH liquidation OF this European posi-
ion as may have TO be conducted or TO
.nsble Europe TO pay It's bills TO us other
wise. In any event Europe's investment
ere limits our Independence OF the cir
,umstances OF the war.
Europe Likely TO Pay Its Debt. with
Our Securities.
While it Is true that our stock market
never had a. fair opportunity TO and It's
'evel through public dealings after the
outbreak OF the war, il Is equally true
hat panicky selling on account OF IN.
var Is hardly to be spprehended again.
TWO psnics from the same cause are prac-
tcaly impossible. What might happen
Y Il should seem that prevailing opinions
we're to be COMPOUNDED BY German VIC
tory In the war can he imagined but
"iEns or German triumph cannot he dis
cerned even IL the end OF the war Is
obscure. To say that there will he no
more foregn liquidation OF stocks and
"onds caused by panic IL not, however.
the same thing AZ saying shat there will
Ne no selling on account OF necessity
Again the menace OF foreign liquidation
which disturbed us most last autumn was
the potential threat OF drain OF gold
which would exhaust the hank reserves
OF the country as we'll as depress values
unencUrably Fear OF gold drain has
zen removed and the foreign exchange
tuauou is such that any pm bable liqulda-
lion OF securities from abroad can be
comfortably financed. Bankers are no
ourcr apprehenS.ve OF monetary dis
turhance on tina. account and II is obvious
lso that the money market has a splen-
iid capacity to accommodate declines I'm
values and absorb sales, but even In these
respects conditions do not signify that
here will be no supply OF securities from
abroad when the market looks as though
L would take them. Nor is IL slgniied
mat prices will he continually immune
from the effects OF liqudating sales
II has been demonstrated tina; domestic
demand is IN excess OF the supply o.
securities. II has been demonstrated
hat foreign investors are disposed to
abide favorable opportunities and favor.
able prices for realizing. IL has been
demonstrated further that Il more con-
ident financial sentiment has developed
IN both sides Of the Atlantic which will
'onduce to a decreasing supply Of stocks
On declines and an increase OF buying
\s stock exchange portents are closely
-elated to the general business outlook
his evidence OF the status OF values Is
'ncouraglng, but finance has yet a prob
EN- 70 solve in which Wall Street par
tlcuilrly and business generally are in
terested.
The stock market is unmistakably in
rolved In the answer 20 be give: 10 the
question as to the way In which our credit
alance accruing in internationaP financial
Iperators Is 20 0e adjusted 10 the neces-
ties OF European and other countries
'ew, II any, bankers think that We will
ct much gold IN payment OF our bills
Resort 10 various eXpedients can be had
1broAd TO keep US from getting II. At
| ne moment 1t is doubtful II effective pro-
lection could be given 10 foreign gold
supplies by raising official discount rates
/ IN the money market, but our bankers
viii not be anxious to force a foreign
'esort TO devices 20 keep gold from
oming here. assuming that the metal
can with safety be moved from one
Duntry 10 another. The consequence OF
Compelling foreign clutch on gold hold
ngs would be disturbing TO say the lea ri
md might be destructive
Ordinarily payment for our exports OF
different kinds would be made In CORE
/ spreading imports. but our import move
/ ment has been checked and many lands
! 20 which We are exporting heavily will
/ not be able 10 expand their exports to us
/ Il neither gold nor commodities come
this way in payment there remain only
| those processes OF settling our credit
| balance which fall IN the category OF
/ transactions In capital, that IS through
[ the shifting OF securities or through bank
/ loans.
From a strictly money market point
/ Of view 1; may come 20 very much the
/ same thing IN the end whether we take
| back some OF our own securities from
| Europe on terms favorable TO ourselves
| or whether We make direct loans "a
| Europe and 10 the nations which usually
! look 10 Europe for funds, either by the
I extension OF bank credit or by subscrip-
| tion to foreign issues OF securities. The
reimportation OF American stocks and
bonds from abroad means selling in the
domestic market that is, liquidation
1 which Is bound 10 upset prices and I'M
/ pede recovery. Buying European. South
! American, Canadian and other foreign
( security issues will not so directly affect
/ the market for domestic values and 20 the
extent that Il relieves the domestic mar.
ket from direct actual or potential
/ pressure 1t will permit recovery to make
! progress.
! Accordingly IL is OF ausplcious omer
/ that our bankers have begun 10 enter into
a field OF finance hitherto almost exclu.
sively occupied by the bankers OF Great
Britain and France. The Argentine SIS,
900 loan. the small Canadian loan.
which have been taken and purchases Of
other foreign descriptions constitute only
very modest beginning. but they arr
manltestiy an effort to ind a solution o.
tho new problem denoted by the fall o.
/ the foreign exchanges. But whom the bill
which we are piling up against Europ,
and It's regular financial dependencies 1,