The sun., 1916-10-23
FINANCIAL NEWS
AND COMMENT
Prices, Uuinflated, Move Up,
Guided by Easy Money and
Corporate Earnings.
OUTLOOK STILL BRIGHT
Traders Will Have to BE eau.
tiOus, as Election Scares
Are Probable.
OUTLOOK STILL BRIGHT

cu1ation M Treasury Department shows
that there Is more actual cash in the
country han ever before reported. Re
ports to the Federal Reserve Board indi-
cate that the supply Of money 10 better
distributed than at any other time In
years.
National and State bank reports ana
statements from trust companies pre-
sent reserves we'll in excess OF legal re-
auirements And loan account which are
protected by safe margins and which
are not in any q overextcnded. And
gold from abroad continues TO now into
our vaults. In view OF this situation In
money II In not surprising that the gen.
eral tendency Of stock mYtket values is
In the direction Of higher levels. part!c-
ularly as the buying Of stocks has the
backing Of big earnings.
Easy money and great corporate
earnings are proving a combination that
the bear Spectator cannot successfully
combat. Prices have been moving up In
an orderly manner and they have not
gone into the stage OF imitation. They
do not overmeasure the actual worth OF
securities. While In the greater number
OF instances they do not fully reflect the
Improvement In the earning power OF
the companies represented or the extraor-
binary position OF trade and industry
which promises to prevail for months to
come.
In spite. however. Of the strength OF
the factors underlying current upward
movements In stock quotations. the mar
ket is not immune to passing adverse
developments. nor is II safe to make a
49, L. 49,
will not occur. At the moment tech
meal conditions are much more In favor
Of a reaction than they were a week ago
and 1t is not improbable hat such n
reaction soon will come along. possibly
this week II the operators for the de-
cline are successful In launching an cleo
ton scare. or II the substantial financial
interests lind II advisable to check the
rapidly increasing public speculation
upon borrowed money.
Overstim ula tion FrOwned Upon.
The larger interests are bullish for
the long run. and their own plans for
various big financial operations will be
materially helped by strength and sta
biuty in stocks. but they are opposed to
anything In the natute OF an overstimu-
lated market. such as that which re-
ttNlti, var IDu III " u shou'h FA'P ~
the peace talk OF a prominent banker
II the subsequent raid by a German
undersea boat In waters adjacent to the
American coast. Bankers nave a
important financial transactions in mind.
including another loan TO Great Britain
and new financing for some corporations.
and they naturally are mucn concerned
in price movements OF securities and are
anxious to strengthen public confidence
in all classes OF representative issues.
The public investment community. how
ever, apparently needs little encourage
ment from bankers. as II is sending .
vast amount OF money into attractive
stocks and bonds on the basis OF Its
own Of tie general investment
outlook.
Stocks are being taken out OF the
| Street by cash buyers. Mortgage issues
are in active demand and new onerln. =
are heavily over~ubscribed. while. as a
matter of fact. the current demand is
heavier thar the actual supply In 80 far
as the highest grade OF bonds are con-
cerned. Bond men hope for a great out
nut Of new issues by the railroads, hut
the arn.ngs OF the roads are so heavy,
with such excellent chances of further ex-
pansion for another twelvemonth period
that the new Gnancing through mort
snge securities probably VIII not meet
the expectations Of the bankers
Many railroads will be able TO finance
their needs through their own earnings
rather than through an addition to their
capital account. 1t Will be the SAINT
with the big industrial corporations, hut
a great outlet for investment funds Is &c
he provided In external loansh by foreign
countries. notably England and France
The American investor is far more par
tial to foreign securities han he was
six months ago and when tho expected
$500. 900. 900 loan by Great Britain GOMEZ
upon our market It will not be necessary
for international bankers to start
campaign of education in order to show
the man with money the merits OF the
security.