Evening star., 1916-01-09
|STOCK MARKET NOT
IN M0OD.TO SLUMP
Seasoned Securities Score
Gains Despite Impulse To-
ward BearishnesS.
TAKE ENCOURAGING VIEW
OF FUTURE OF BUSINESS
Financial Leaders See Great Pros.
perity Ahead, But Still
Urge Caution.

perity Ahead, But Still
Urge Caution.
NEW YORK, January S-The first
session Of the new years stock market
was very agreeable surprise to those
who had compelled themselves to be-
iieve that new season of calamity
was about to befall the great trading
center. Indeed. many traders who on
Friday of last week. under the infiu-
ence of the optimistic Impressions cre-
ated by the second Austrian note.
bought heavily of the leading issues,
were filled with gloomy forebodings
when the news OF another submarine
disaster reached New York Saturday
afternoon.
coma markets still fresh in memory,
the destruction of the Persia awak
ened fears that previous experiences
would be repeated, and that prices
might break seriously. Such. how
ever. was not the case. Only frac-
tional declines were observed at the
opening of the market. and the pre- (
ponderance Of buying over selling or
ders was SO great that prices moved
upward instead of downward. More
over, Mondays transactions amounted
to more than 100000 shares of stock,
and was in fact the first million share
day in more than six weeks The
public interest in the security markets
since the turn of the year has become
quite keen. and investment bankers
predict that the upward swing in stock
prices. which began in such an en-
phatic manner in the autumn of 1915,
will continue without abatement we'll
into 1916.
Seasoned Issues Favored.
Further comments upon the tre-
mendous increase in security values
in 1915 would be superfuous at this
time. but as new facts are being pre-
sented and new light shed upon this
subject by Official reports and by sta
tistical bureaus the tremendous appre-
citation in some of the market favor
ties is apparent. In only a few re-
mote cases were these fuctuatio ac-
companied by spectacular movements
in the stock markets; but on the whole,
Americas prime dividend-paying rails
and industrials have moved into a new
position of public favor, and the in
creases in their selling prices is as
logical as the sunshine after the dark
ness.
With the tremendous increase of the
purchasing power Of American trades
men, artisans. professional men and
farmers, the great industrial concerns
of this country will not in future be
compelled to look to foreign investors
for the capital necessary to expand
their enterprises, but on the contrary
American capital will figure largely in
the development of profitable enter
prises in foreign lands. This increase
in purchas sing power will express itself
not only in security values, but in the
regular channels of retail trade, in the
decrease of unemployment. and in the
raising of the scale of daily living of
all people. especially the working
classes. 'Tis true that the prices of
automatically seek a higher level, but
not in the same degree as the rising
scale of American commercial pros
perity. Good times mean high prices.
but the law of perfect equation need
not necessarily govern the case.
Greater Demand for Money.
Present indications are that the Pile
thora of money. which during the Sec
ond half of 1915 constituted such a vex-
ing problem for our banking institu-
tions. will not be in evidence to such
a prominent extent in the coming year.
Already the banks in the reserve cities
of the middle west report an increas-
ing demand for funds from their in
terror correspondents. both for agricul-
tural and industrial purposes. The
banks of New York city are now hold
ing in their vaults supply of gold
requirements, but, unless all present
indications are\deceptive, this excess
money will be greatly reduced in the
coming year.
Rates for money in the New York
market this week very emphatically
point to this conclusion. Wednesday
of this week loaning rates on call
money" advanced to per cent, the
highest rate recorded in over year.
The average rate in 1915 was below
> per cent. Time money rates have not
as yet shown any decided inclination
to advance, but it is freely predicted
in two or three months from now the
rates will be 1 per cent higher than
the 1915 average.
Exchange on Germany Low.
While sterling exchange has for the
past six weeks considerably strength
ened. exchange on Germany during
the past week dropped to the lowest
point since the beginning of the war
Demand bills on London this week
sold at 4.74ia, and cable transfers at
Ash. German marks. Tuesday of
this week, declined to as tfor
marks). or at the equivalent of 1Ss4
cents per mark, compared with the
normal par of 23a4 cents The decline
accordingly, to 81 per cent
at present prices. Exchange on Aus
tria was also at a low point. Gronen
were quoted at 1890 cents. against
the normal value of 2OA cents. The
weakness is explained by bankers with
German sympathies as due to the fact
that the central empires are export
ing nothing, and so creating no new
credits abroad. Others are of the
opinion that the growing weakness has
resulted from the fact that Germany's
new debts are all internal, and that
the country is practically on a paper
basis, giving rise to imitation. Bankers
acting for the German government
have lowered the prices of German
and Austrian bonds to take account