The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-08-30
FINANCIAL REVIEW
OF The PAST WEEK
Underlying Strength Explains
Strong Recovery in Stock
Market.
PRICE LEVEL VERY HIGH

Making all allowance for the light
ninglike disappearance Of the threaten
ing phase OF our international relations
and for its instantaneous effect upon
sentiment, the tremendously strong re-
coyery In the stock market had a special
significance. II was in no small part
due to the broad underlying strength
of the speculative position.
The stock market throughout the
crisis, cven when a break or diplo-
matte relations with Germany seemed
exhibited almost indifference
to the possible consequences. This Is
tho more remarkable BECAUSE the SINK
ing OF the Arabic came at a time when
from a superficial point OF view 1t might
have been expected to do most damage.
As a matter Of fact the decline was
conducted in a quiet and orderly manner
and in extent was not more tina the
normal reactions that periodically occur
In n bull movement. The rapidity win
which the stock market retraced its
stems was In proportion to the degree
Of resistance developed by prices to the
fall. The secret of both these phenom-
ena lies In the Lact .na. Ia ,ba,
hdence was no Wnt Ins,s h,,,,ny
not for a moment uro au,iooI
or stocks cease. even VIZ 10.
so far as a rupture oi $780,,
tions with Germany looked blacklist.
AT the close o. ,he ,h.
some criticlsin vi u'o -
ground Una IL Vas e, di..
the matter mas NJ. 80 .h. a,,hsa,uan,
posed or but whateNei ~ Sr.nnt.,,
d~evelopments' inc hnaiein on.ntsiii,,,
X IL Tor granted TIA tno paar'a,,
or a break win nerIlany ~ a. a, aiy,
been removed otnerwlse !. hnus -
hcult to explain the pewhoerihs nAso
OF the attempts 10 re.SN
the Washington Government Vi ~
real intentions. Also. III connection wiz.
the recovery, IL must ne rerhe'h"ele"
that the German American SITUATION rep
resented to the general public the sole
source of doubt In the immediate out
look. All other conditions. both imam
ciai and economic. have been OF a nature
to speculation.
There Is no doubt that the country is
I'm the grip OF a furious speculation In
stocks and that this speculation Is SON
stantly broadening. The market results
OF the Arabic incident and OF the subse-
ouent relief from the tension engendered
thereby were typical OF a bull market.
70 anv additionai nroof were needed The
Arahic Incident submitted II Moreoyar,
4, no. haon uhovn that thas strength OF
nuhIic in the market outlook
bas sustained n considerable growth
sInc. ,ha ias, grea, ,es, wa. annIied IN
,ha shana ~ ,ha I,us,tonia tragedy The
49, ~, ~, ,t,,a rs T., III naiur. -
oieaN az S'ie s'"io "'' ~ Nv nv
auN arV.e - 81 nnov.-
mem, u.s. Jesrt,ary r.s,,rab An, ,bo..
80 "" -. ..aaS.nas
were eaii! uass' ""e' wv"
was re'aeNel! 'o", ~
pt.Ne"e P.n. 80 %,
~
-. s'm, a. ,h.
s,,vro IT, n,h,,n anna,i,a nron.
taonar ~, np,npa ~ ~ r, thar.
GO $50 ;m ,hrs aaaas. on th. nar,
-, H. oo,n,r, 90 -, .,ncu. nd, ,hs
lnrs Of war orders i. natent II NAV
he sta ,ed with cer,aIntv ma. Tho bene-
fits from the war business obtain,d nv
some Industrial concerns have been
grossly exaggerated. Sooner or later
the boom will h. oyerdone Rut. IN
the other hand, there is solid value be-
hind the prices of many industrials. and
the difficulty lies In estimating precisely
wher the line OF prices departs from
the line OF values in each particular
instance.
But whether or not the present price
level is eventually found to be justified
there is nothing to suggest a culmina-
ton of the movement in the near future.
The essential ingredients or a bull mar
ket are abundant credit plus a state OF
mind. The public mas the speculative