The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-18
FINANCIAL REVIEW
OF THE PAST WEEK
Stocks React From Congestcd
Speculation in Industrial
Shares.
FEELING NOW CAUTIOUS

There has been some subeidence Of tn
reckless speculative spirit in Wall Stree
which has ooincided With the manifesto
ton d reactionary stock market symp
toms. both in respect to the scale o.
activity and the tendency Of prices. New
engagements for the rise have been les,
readily entered into. while contracts al
ready made have been moro readily can.
celled. Whereas a fortnight or % bach
the thing which everybody could see Or
the market was tho buying which wa.
gotns On At advancing prices, II has beer
the selling which has been more visible
in he last few days. A fresh increase
Of foreign liquidation was a factor, bu,
quoted values showed more plainly tn,
effect Of the extensive distribution OF
Industrial stocks which has taken place
this autumn. and rather a large aggre.
gate OF scattered commission house
realizing was as usual Induced when the
share nst began to soften.
The correction Of tho markets position
by the industrial break two weeks age
was not sufficient. possibly because /,
was succeeded 80 swiftly by a shiftine
of speculative activity to the rails and
coppers. But on the whole the declin.
Ing tendency OF quoted values last wssh
seemed to be very much the result of a
marked diminution OF bullish momentum
NE Influences which provided the i'm
pstus may not have exhausted their
force, but circumstances and sentimen,
had combined to make the market NOV,
a. though under brakes.
Last wAeka Chopu~ u 80. .-
aspects Of the market was ushered in BY
= dennite manifestation OF uneasy senti.
mont In speculative quarters. Wal
street seemed to have become somewha,
AFRAID of its own rise In stocks, and
psychological conditions we're conducive
to a contraction Of the long account rather
than an extension OF II. DEVELOPMENTS
OF this sort were not unwelcome In their
suggestion OF a moro cautious and dis
eliminating disposition instead OF the
speculative excitement which recently
prevailed. All Of the influences which
nave been working to improve the gen-
eral business situation in this country
have an excellent opportunity to reflect
themselves in q proportionate enhance.
ment of substantial values n speculative
impulses do not become a mania dan
gerous TO n whole financial structure.
uADO tAob bho IIVEs OH
tile descriptions Of the share list oner,
because Of their evidence Of haza rdous
'nstabhity. a less hectic attraction for
uninformed public dabblers in stocks the
wall street situation itself will prob
ably become sounder.
1t II still! the fashion to regard with
some contempt the steadier, slower and
more limited course of Improvement in
rails and other standard issues. but the
real stock market is always In the
standard securities. Without disparage-
ment Of the large profits unquestionably
accruing to some corporations directly
or indirectly from contracts for war sup
plies. tho corntry's real state Of pros
perity will be expressed in the terms OF
quotations for seasoned shares. II as
the result OF the experiences which Wall
street has had In the last fortnight such
securities come to be regarded with more
favor 70 much the better for all interests
concerned. There Is hardly likely 10 be
so much action in them speculatively
speaking rs In tho war stocks. They are
certain TO cause less heart action, and
not until there Is a better balance of
buying In the standard mediums OF the
list a full confidence he felt in the
Stock Exchange efforts to discount pros
perity.
There Is nothing to show that the stock
market has been placed lately in any
very perilous position, but there has
deem q good deal to suggest that II was
sunering almost exclusively from inter
nal troubles and little IL at all from ex-
ternal difficulties or the threat OF them.
Affairs outside Of the market have been
encouraging. II has been the market It.
self hich did not look well and there
could be no mistaking the meaning Of
hA
week or more g that tho market looked
tired. When such an opinion has valid
grounds II always implies that there Is a
technical situation which renders some
read5ustment Inevitable.
Tho truth about the recent market
seems to be that II had become closged
or congested with q certain class OF
or. to put II another way, bullish
speculation had become o~vercrowded In
tho industrial department. Despite the
well founded observation that war CON
tract profits represent only temporary
business values arc being made by earn
that arc Just as actual as they may
10 abnormal. There Ia, however, a great
deal OF ignorance about tho war NUM-
ton shares and there has been a rather
inordinate public scramble for industrial
descriptions wondered allurinH by the
glamor of war profits. The result has
bean that Wall Street has been CON
lately with a question which
did not so much nvolv the merits of
Industrial haros or the merits of the
price level as II involved the ownership
of these stocks. who hello them and how
they were held.
II always makes for trouble in a mar
II stocks arc held by a great num-
her OF people who have bought them
only to sell at advances TO other specu-
latore. The merits of a price level Will
support stocks II there is an over
extended speculation for tho rise in them.
The market is then not only vulnerable
to shock. but II Is subject TO scares and
a stampede to realize. a weeks re-
movement In n sequel to the
Industrial break of the week before was
a corrective measure, for II
had become clear that rising prices no
longer attracted buyers as readily as
they attracted sellers. The indications
ware unmistakable that there were too
many people in the market looking for a
chance to get out proitably or without
loss and too few people outside of the
market looking for a chance to get in.
banking restrictions, severely limiting
tho collateral value OF fancy stocks, de-
the state Of congestion rather
more rapidly than would otherwise have
G N CAS-
Usually reckless speculation for the
rise goes on until the multitude OF par
Elephants comes to grief. 1t Is perhaps
too much to expect that there has been
witnessed anything more than a tenn
porary moderation OF speculative trans
ports In response TO the warnings ut
tered taiu month and pointed by the
sharp collapse in the war stocks around
the beginning OF the month. AT the
Annn fItn. fhnua t