Evening star., 1915-02-21
failure Of BEARS
T0DEPRESS TRADE
New York Exchange Reports
Stock and Bond Market
Well Patronized.
COURSE SINCE JANUARY
SHOWS NORMAL CONDITION
No Difficulty Experienced in Rail
way Financing-Lower Levels in
Foreign Exchange Rates.
Special Correspondence of The Star.

XO1ClSu CACuduSV 4kot0S'
Special Correspondence Of The Star.
NEW YORK. February 2o.-P Predic-
ton has already been made in this re-
view that the February reaction"
which naturally follows the January
rise' would not be SO pronounced this
year as has formerly been the case
Three weeks trading has quite satis-
factorily established this contention
and it is now believed that those who
went short" of the market in anticipa-
ton of lower prices will pay dearly for
their mistake. The course Of the stock
market for the first three weeks in
February has been perfectly normal,
accompanied by continuing ease IN
money, and, in the last week especially.
a chain of favorable factors that have
greatly assisted in keeping up the tone
of the market.
Therefore, it develops that the at
tempts of bear raiders to depress prices,
heretofore so successful. have this year
in this process of price depression
started in by announcing that dividend
reductions were positively forthcoming
in certain of the leading stocks. ana
no secret was made as to the stocks
which were to suffer by reason OF such
reductions. The first stock picked out
was Canadian Pacific, but when the
directors of this railroad met and voted
the usual dividend the bears fell back
upon sugar. When that stock dlsap-
pointed them in the same way they
predicted a cut in the Southern Pacifc
payment; and Southern Pacific declared
a regular dividend. Then the interstate
commerce commission added to the con-
fusion of the bears by handing down
decision favorable to the western rail-
roads In what Is known as the inter-
mountain rate cases. The natural con-
sequence of these developments was a
rush on the part of the bears to cover
short sales, and that in turn caused
which are still inclined upward instead
Of downward. The turning point seems
at last to have been really reached.
Accepted as Barometer.
The steel trade is generally accepted
as q reliable barometer of business
conditions, and here we have the Unit
ed States Steel Corporation, for the
first time in many months, reporting
a noteworthy increase in the volume
of new orders booked. The gain Tor
the month over shipments is in ex-
cess of 411,OO0 tons. and the corpora
tion's plants have been speeded up to
65 per cent of productive capacity. For
four months these plants have been
operated on a 40-per-cent.o of capacity
basis. The great Gary rail plant has
resumed operations, and mills in Penn
sylvania and Illinois are taking on
more men and making shipments on
scale which indicates urgency in the
demand. The highly sensational fea,,
lures of the markets for wheat and
cotton have yielded to a settled firm
ness in harmony with facts as COM
pretended more closely than in the
ruary. The theories are giving place
to facts in the war proba bilities and
effects on American trade and com
merce. Even with new international
Economically, the United States is ad-
justed we'll, is solid as rock, fnan-
cially and commercially; and POLITICAL
ly, is steering the true course among
the breakers in which the European
war has involved the world. All these
factors come at time when the stock
market is more or less in need of a
special stimulant, nevertheless their
influence has been highly satisfactory
and Wall street has every reason for
gratitude over the present outlook.
Though much is now to be desired in
the realm of mercantile and Industrial
Improvement, there is small reason
ment markets (stocks or bonds), and
the demands of the public along these
lines are perceptibly increasing.
New Financing.
No difficulty seems to be encountered
by the larger railroad and industrial
corporations in arranging for necessary
financing, especially where the funds
are devoted to profitable expansion of
earning facilities. The latest announce
ment in this direction is that of the
New York Central railroad, the directors
of which have approved an issue OF
500, 100000 in s per cent twenty-year
debenture bonds, to be dated May J..
LIS, with privilege OF conversion into
stock at 105 between May I, 1917. and
May 1, 1925, the bonds to be redeemabie
underwritten at par last week with
such success that application for par
ticipation in the syndicate greatly ex-
ceeded the amount of the issue offered.
This is but another striking Illustration
of the exuberant condition of the secur-
ity market. By this issue-whlch is
yet to be approved by the stockholders
and by the public service commission
the New York Central will adopt the
more modern expedient of substituting
a long-term security for an equal
amount of short-time financing. This
substitution is one which should help
not only the finances of the company.
but the security market itself, for 1t
short-time money market had been
used rather too largely for the f1nanc-
ing of railroad and other large re-
quirements. 1t is to be expected that
still further progress will be made in
the next few months in substituting
for funds obtained in the money market
funds obtained in the capital market, in
substituting in other words permanent
for short-time financing. That is one
of the movements now under way
which will put us on a still firmer
foundation for the gradual forward
movement which is expected for the
country financial and commercially. and
which seems to be expected on many
good grounds.
Foreign Exchange.
During the past week the rates for
sterling exchange declined to lower
levels than have been recorded since
the last great European conflict. While
a great deal of attention has recently
been paid to the latest complications
In international trade due to the war
proclamations of the European belltg-
erents, the exports to Europe from
this country have consistently in
creased. The result has been that the
o~or;nao oF hills of exchange against