New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-01
REVIEW OF THE
FINANCIAL WEEK
Sharp Break in Inflated
War Stocks Followed
by Rise in Rails.
STEEL EARNINGS
AND WAR PROFITS
Sterling Exchange Goes Lower.
but Rallies More Gold
Swells Our Surplus.

Progress was made last week. for a
time in rather drastic fashion, toward
correcting the overtrading in the war
industrials that had given the market
such topheavy appearance in that
part Of the list. II speaks well for the
strength Of the financial position that
the break in a few stocks for, after
all they were only few-did so little
TO disturb other securities. On Thurs
day. when equipment and automobile
issues got to their lowest, from 70 30
or more points under the best of the
week, at least eight conspicuous rail
roads went to their highest for the
year.
Conservative commission houses had
been warning their customers that
stocks could not go up indefinitely.
Granting the increased prosperity Of
the country, the immense war orders
and stupendous exports, sooner or
later, they insisted. continued rise in
any stock must far outrun any added
value it could be supposed TO discount.
A market with an overwhelming pro-
portion of long accounts which must
be closed out by sales was in vulner-
able position, they pointed out, and
must expect a severe setback. Those
houses that followed this line of rea-
soning were able 10 meet last weeks
break with little extra work for the
margin clerks.
Apart from any external influences.
the stocks that had been put up so I'M
reasonably were due for reaction, and
last week there came from outside
causes for decline. The course Of
war in the Balkans went against the
Allies, with whom our trade relations
are so close. limitations of peace pro-
posals of German origin suggested that
our industry. adjusted TO supplying
wars demands, might have to adapt
itself TO new conditions. Rumors Of
trouble in the British Cabinet and the
collapse of the coalition ministry in
France brought some doubt as to
whether the determination of those two
great nations TO persevere against Ger
many and Austria might not after all
be shaken.
Liquidation Heavy.
The speculative rise for the week or
so preceding had been limited TO few
issues, and a good deal of liquidation
had been under way, concealed by con-
spicuous advances here and there.
United States Steel had been leader
as the time for its statement of earn
ings for the third quarter approached
In that company, so great as TO give
view of most important industry, so
open in its accounts as 10 allow the
public TO judge of its progress, hopes
of the war business seemed TO centre
When its earnings failed TO meet eX-
pectations and its directors decided
against resuming dividends on the com
mon stock, war profits. for a time at
least, seemed inadequate TO carry the
upturn further.
II war is continued and makes the
expected demand on products of our
fields. mines and factories, we shall
doubtless see more needless speculation
in issues of concerns supposed to be
receiving benefit. Each setback, how
ever, keeps prices little closer to val
ues and gives warning Of the unstable
ground on which structures Of paper
profits are reared. Indication of saner
trading appeared when dividend paying
railroads and industrials, including
some Of the copper stocks, received
more consideration after the break in
the war group.
Steel Guide to War Business.
The quarterly statement of the
-. toe az