The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-11
FINANCIAL REVIEW
OF THE PAST WEEK
why Wall Street Shows Favor
to Standard Shares After
War Stocks Break.
OUTLOOK ENCOURAGING

What happened In Wall street In the
last few days wa a recognizable phase
in the development Of a big bull market
engaged IN discounting the spread OF
prosperous activity. a widened distribu-
ton Of the proits of trade n industry.
IN expansion OF enterprise n a ma
terial enhancement OF real values. There
Ii everything to indicate that the coun-
try has ahead Of II n period OF growing
prosperity. There Ia therefore every
reason TO assume that the constructive
speculation which has characterized
Wall Street this ear will continue. Al
the same time the stock market last
week presented more than merely q
phase Of check administered TO a specu-
iation which had been overdone.
All the circumstances OF the stock
market during the week implied that
speculation la passed trough a stage
Of transition from a one sided express
sion Of rather avaricious optimism TO q
broader and more soundly based antici-
patton OF substantial Improvement In
values generally. There were two dis
tinct features OF the market. the first
being tho violent breaking down OF a
topheavy gambling structure reared In
the war munition shares and stocks
which. according to more or less credible
report, were destined to figure In new
corporate combinations. The second was
tho rising strength and growing activity
displayed In quarters OF the list. as In
railroad shares and other descriptions,
which a been more or leas neglected
n not altogether idle during the frensy
OF excited public buying In the wal
order group.
II ono stock market event was more
gratifying than the other II was the
favorable attention paid to the standard,
seasoned and stable departments OF the
share list. There was evinced a dawn
ing appreciation that other factors thar
contracts for war munitions and sup
plies for military requirements generally
we're entering into reckonings OF value
Securities which represent the obliga-
tions or equities Of the normal business
of the country are being affected for the
better by O variety OF encouraging In
fiuences and the extension OF buying
favor to them Ia a token or Wall Streets
rather belated comprehension OF con-
structive facts which are ~disputing the
prominence of the traffic in war con-
tThCts an n
and industry.
This is not 10 say that much OF the
material rise In Industrial shares in re-
spouse to wal munition contracts has
not been warranted. Probably 10 per
cent. OF the advance was Justified. and
the swift collapse Of prices early last
week is no d~isparagement OF the values
accruing to war stocks from prospect
i've profits in the production OF military
supplies. The trouble was that the pub
lie spectators who have burned their
fingers with them had come to constitute
too numerous q company. Nothing Is
sounder In the maxims Of finance than
that a level OF prices which may be
otherwise warranted Is almost certain
to give way whenever speculation fol
the rise IL overextended. and all the evi,
dence Of Wall Street phenomena more
h a q week ~ went to show that a
breaking point was near.
The o~wrtaxing Of the Wall Street ma
chinery wal alone enough to denote ex-
cess!ve congestion OF margin contracts
entered into in the hope Of profits to
be gathered from sales at higher prices.
In all directions there were signs enough
that what did happen was exactly what
would happen very soon. The stock mar
ket was crowded and sensible persons
withdrew from It or at least from the
crowded sections, because II Ia only a
crowd which a stampede. and some
thing like q stampede started last Mon
day. 1t was all over by Tuesday after
noon. but Il would never have happened
II conditions conducive to a stampede
had not existed and II had no other cause
h n the sudden spread Of realization
throughout the stock market following
over last Sunday hat It would be dim
cult to get out OF the market II every
body tried TO get out at once.
Judging from the Wall Street RECORD
In the last half OF the week the specu
lative community was not hurt much
Many millions Of dollars OF . profits
In n aggregate were swept away, bu'
thare was little evidence of any impor
tant Impairment of original capital an(
new conditions were created which wer,
conducive to n sober and more discrimi,
mating engagement OF FUNDS in the spec
ulative possibilities OF the present time
One good result accomplished was tina
point had been given TO the warning,
which were addressed more than a weel
g to tho unwary Another was tina
a very desirable change had been eff
fected IN tho structural position of tn,
stock market itself. still another wa
the emphatic direction Of notice to IN,
merits of securities which must partici
pate In the general recovery of pros
porous activity throughout the land
Moreover. even to specula tors spoile,
by the velocity of fluctuations in tn
war order shares the ease and facilit,
with which rails, coppers AMI other de
scriptions came into prominence In u,
middle OF last week and afterwar d dem
onstrated that all the speculative attrac
tions of tho market were not limited L
war contract stocks.
Wall Street. both in the brokerag
houses and in the banking community
welcomed the changed aspect of tn
share list. 1t promised the establish
mnt of a more balanced position A
the market in addition to Offering NOR
than a hint that business prosperit,
was spreading beyond the confines q
war supply Industries. And when Wal
Street set out TO buy issues outside In
class OF recent favorites Il found
state Of scarcity which was sufficien
In Itself to provoke increased demand.
Never for any great length OF tim,
does the public permit itself to be with
out standard stocks and never for an,
great length Of time is Wall Street with
out an ample supply OF them to put int,
collateral loans. which are always ne