The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-03-22
FINANCIAL REVIEW
OF THE PAST WEEK
Minimum Prices for Securities
the Only Artificial Element
in the Situation.
TINE TO REMOVE THEM

All through last autumn discoura &c
ment was the reward OF every attempt
TO ag,tate the question OF reopening
the stock Exchange. II was not until
a few days before the qualified resump'
ton Of business in the country's primary
securities market actually took place
that such a development was generally
regarded as conceivable. The benefits
II stock Exchange resumption have been
considerable. n has played a large
part in facilitating the country's move
ment away from the extreme OF panic
depression and has contributed It's share
TO the establishment OF American finance
in a state Of international a~scendency.
Nevertheless Il has to be recognized
that the restoration OF the open Sc
~curities market has been but qualified
and incomplete. II is not u free market
n cannot be Va long as Il Is based
upon the so-called protective minimum
prices instead OF manifestly upon the
foundations which always have to be laid
in any financial sequel 70 panic dis
turbance.
There Is no more encouragement now
for the proponents OF an abolition OF
the minimum prices than there was Tor
those who a few months ago suggested
the reopening OF the Stock Exchange.
Yet the question OF n removal OF the
minimuns deserves consideration from
every angle from which It can he re-
garded. The chances arc thai II the
step were actually taken II would he
found an easy thing to do in II same
sense that II was found easy to restore
the opcn securities market when II
seemed difficult.
Necessary as Il was TO close the Stock
Exchange last July, II was stlll more
necessary To end tho Stock Exchange
suspension. With the restoration or the
securities market tho return OF general
confidence was promoted, ever though
the growth of confidence has not yet
been marked. Desirable as II was to
nut an embargo on gold exports III the
acute phase of the panic crisis, as soon
as arrangements We're made TO settle
the countryis external debts in gold a
tendency was set up for gold to move
from all over the world to New York.
Arguing from the discoveries which we
have been making IN the war. thc most
probable consequence of setting me
country's securities market absolutely
free again would he advantageous TO our
economic interests.
Apart from more or less meritorious
upward movements of various INDUS
trial stocks the securities market lacks
anything which a he described As a
trend. whether or not the level of
quoted values IL warranted by any esti-
mate OF real or potential values, the
"Reminiscences Of prices generally can
properly be ascr!bed to the total absence
OF any OF the customary satsfactiois
which the market affords as TO its po-
sitlon. This in turn could hardly be
! attri butable to anything else than the
interference OF minimum prices with the
free play Of the forces which are bound
to operate sooner or later.
Making due allowance for the Euro
pean wal and all its hazards the great
est element OF uncertalnty IN the secur'-
ties market is denoted by the minimum
price obstacles which have prevented
any proof OF its real status. II Is alto
gether likely that Il the minimums were
removed the financial markets would
provide more !nducemeut to activity and
more timulus to general business, even
though there is no ground for assuming
that this would result from q materially
lower or materially higher level OF
quoted values for securities.
At last tho London stock Exchange
with the consent OF the British Treas
ury. has begun q downward revision OF
minimum prices ia what was before the
war the worlds primary market FOR se-
curities. II has even gore SO far a.
10 make the protective level flr Ameri'
can securities the same as New York =
II London can do as much AS this II
the terrific strain which the war throws
upon II. why carnot protective prices b,
altogether abolished here The usua
answer to his question - That minimum
prices are doing no harm. but are the!