The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-07
FINANCIAL NEWS
AND COMMENT
sharp Break in the MunitiOn
Stock List, With Only
Slight Rallies.
RAILS SHOW STRENGTH

lion III wal Oruer STOCKS anu lHuus'
trials rumorcd as figuring In project,
for new corporate combinations. TIT
essential facts remain regarding thu
large profits which are accruing or ma,
accrue on war contracts and nothing
Is more likely than that present con
ditions will develop realignments n
the corporate field. but these consider.
ations are rather aside from the dan
gerous extension Of margin commit.
ments for the rise which made the stoci
market obviously more than topheav,
several days ago. The indications las
night were hat the undoing OF thu
reckless speculation had been practi
caliy accomplished by the enectua
process Of putting on the brakes, fol-
the third day Of continuous decline cul.
minated In a violent break which swep'
away pyramided pronts and removed
shaky price structures which hat
threatened the whole list.
Dealings aggregated about a million
and a half shares. n except for SOM
displays Of feverieh buying In the fore
noon trading was mostly on the sell
ing side until toward the close 10 fai
as concerned the recent favorites of in
dustrial speculation. An intimation o.
what was coming was furnished late
in the forenoon, when some OF tn
war stocks fell sharply. After a spas
modic rally they gave way again II
midsession and finally slumped heavil!
toward the beginning OF the last hour.
A leader In the days decline was
| Baldwin Locomotive. which dropped
"a points from its high price OF tn,
morning. making a total decline OF Al
points from its top OF a week ago
Crucible Steel fell II points from thu
mornings high level and 80 points In al
from the maximum OF Its recent ad
vance. Westinghouse Electric n a mis-
c~cllaneous array Of war munition share,
suffered proportionately. Bearish opera
lions on the part OF professional trader,
undoubtedly stimulated the liquidation
Of long commitments, but they were as
sisted by the cumulative results OF pre-
vious declines on weakened margins ant
exhausted confidence. Rallies in most OF
the war order industrials took place II
the late dealings. but seemed to repre-
sent chiefly short covering and encoun
tered further liquidation. On the Other
hand. the railroad list and a variety
Of industrials outside the war order
group displayed impressive strength. ant
in these directions the market CLOSED
strong.
This weeks episodes do not detrac'
: from sue merits as the war stock.
have % or in prospect, but unquestion,
ably a lesson In safety has been laugh
to unwar spectators and 1t has beer
demonstrated that discrimination ant
prudence are required In seeking to an,
ticipate the benefit which quoted values
may derive from the rcmarkabI,
economic situation created in this coun
try by the war abroad. Moreover. thes,
lessons have been emphasized by tn,
action Of the railroad stocks In par
ticular and by such industrials as hav,
not been violently inflated on war con
tract conjectures.
Throughout yesterdays turbulen
market such stocks. especially the rails
exhibited strength and held rather frml,
during the worst of the industrial
breaks. only to advance very aggres
sively toward the end OF the session
a demonstration OF this kind NIGH
very we'll have the desirable conse
quencc Of inducing speculative as wei
as investment absorption OF description!
which nave been more or less despise,
lately.
In respect to the rails. they are fol
one thing in "A position OF unprece
dented technical strength. II has beer
most difficult to procure them to pu
into collateral for bank loans n theil
scarcity in Wall Street Is alone enough
to give them n demand value. Such 6
shortage of standard shares does not IA
a rule endure without a great absorptiv,
inquiry s%prtnging up. and more thar
that, the factors which are operating
for a widening increase OF prosperou.
general business activity must reiec
favorably on such securities. There ar,
among stocks OF this class u~ndiscountet
speculative possibilities represented by
an outlook for restored. increased OF
initial dividends. 10 say nothing OF tho
financial encouragement which woult
follow a pronounced change Of publ,
policy in the regulation OF interstate
commerce. Meanwhile investment val
ues cannot fail TO he enhanced by any,
thing which constitutes a valid i~ncentiv,
for speculation in the rails, fractions
copper and other shares which hay,
figured little IL m all in the wal stock
boom.
II remains TO be seen what respons,
a public which has burned its finger
with incerdlary speculation In the wal
order descriptions will make to thes,
facts. 1t is reasonably certain that n,
enthusiasm will be shown for merel,
steady and safe stocks as long as {
medley OF industrials Jumps ten points
day and fifty points a week, but the ever
more violent breaks Of that extent which
have taken place in the last few day,
are likely TO inspire caution by showing
that markets OF n crafty advan cina
character can decline Just as Crafty. Il
may be that a curb can he kept OF
purely gambling p~roclivtties for a while
The severity Of the smash yesterda,
suggested that the bottom had probabl,
been reached In the fall Of the wa
stocks. 1t does not appear that the vic
lent rising movement can be at once re
sumed. In any case the position OF tn,
stock market is Enthusiastically stront
again. even II portions OF the industrial
list should be feverish aHd unsettled FOL
a while.
In the developments outside of tn,
stock market attention was attracted b,
the persistent heaviness of sterling eX.
change, and II The success which tn,
AnglO-French loan Is achieving was re
fected anywhere II was in the rushing vi
of wheat prices about eight cents {
bushel. Thu progress Of general bust
hess betterment was illustrated by thS
weekly reviews Of basic industry which
set forth that September pig Iron outpu
made n record for any one month an,
that the scale of iron and steel produc
ton was increasing this month. with do