The sun., 1916-01-24
FINANCIAL REVIEW
OF THE PAST WEEK
Revision Of Stock Market
Prices Carried Further
BY Reactions.
COURSE TENDS TO SAFETY

still witnessed in the Wal, street securi-
ties market, although II is ono Of the
characteristics Of the present abnormal
times that anomalies abound. There Is
no evidence of any slackening In the
pace Of trade and industry. no hint Of
the customary midwinter hull which the
stock market usually foreshadows by
prices. On the contrary. quoted values
have been displaying something more
than general heaviness relieved by spe-
cial strength Just when business condi-
tlons are most optimistic
A Good deal that has been observable
in the trading In stocks lately can be
accounted for OH seasonal grounds. At
this time of the year attention Ia apt
TO centre more in the investment market
than in the speculative list and specu-
lation suffers from a lack of interest. At
this particular time In the year 1915 IL
Is the most natural thing in the world
for corporate shares to disclose a certain
sensitiveness to selling, certain soft
ness In face of the lack OF buying in
qury, because the stock market Is still
holding very close TO the high level OF
average prices reached only about two
months ago. Those heights were at
tanned IN an extraordinarily rapid spread
Of a mingled speculative and investment
boom. in which presumably advance
went to an extreme for the time being
Exaggerated ideas were entertained re-
gardng the dimensions of profits accru-
ing on war contracts directly and in
directly and values were somewhat over
estimated. In the main, however. the
Wall Street market of last year was an
lfA nat .,f hn v,-tn snf
profitable activity which has developed
in general business and criticism Of
speculative excesses which have been
committed can he carried too far.
II is still difficult to tell whether the
speculative and investment phenomo ma
of recent weeks have portended anything
like an extensive reaction in quoted
values with a corolary of trade and in
| dustrial setback. either in consequence
Of a temporary overdiscounting OF con-
ditions and prospects or because required
by new circumstances which may modify
influences and compel a rcadjustment OF
banking and business calculations. Yet
the Wall Street situation has been more
sharply defined in the manifestations Of
the last few days as one that has called
for some liquidation and decline. The
very contrast between the wavering in
stability OF the share list and the per-
at f'uctusting levels with the unchecked
general business movement forward and
upward emphasized the liquidating ma
ture of Stock Exchange dealings
This was more distinct implication
that speculation had been somewhat
overdone, and the response which the
market made 10 favorable matters which
IT was discountng last year was adj
vertiscnent of position requiring some
I'd. ~. s..I1
OF restored dividends, Increased divi-
dends a,ri extra dividends, the announce
neits of valuable rights to Texas Oil
stnclI lIholders and an initial dividend OF
$40 share on Bethlehem Steel we're
OF optimisti tic import. as they added to
proofs already furnished OF the substance
which profits are giving to real values.
yet IL was again demonstrated that there
were more sellers than buyers waiting
to take advantage of good news. Also
tn" inference was permissible that Wall
street had increasing appreciation Of
the necessity Of revising the views
entertained not so long ago about the
dimensions of profits accruing IN all
directions from th" recovery and OK
pansion Of trade aud industry under
tho stimulus of war orders with an a,-
cel"rated impetus from the revival of
new domestic enterprise
The very acute interest which was
| shown in the prohahlc action Of the
United States Steel Corporation directors
III respect 10 dividends on the common
shares Of the company at the quarterly
meeting tomorrow and in the conjec-
tLral effects of their decision was an
oiher token OF an excessive constituencies
iu the stock market position which
! pointed the conclusion that Wall Street
had been overtrading, taking wall Street
to mean the whole community of public
activities in the constructive speculation
| Of the recent past, and that The stock
market had been overboughi. II is inn
portant 90 observe also that other
speculative markets. conspicuously the
cotton and grain markets, have been
giving similar signs OF overaction and II
would not be surprising to And a little
later that there had been overtrading
| I'm the general business field.
Yet II is equally important to note.
| in considering these speculative matters,
| that the underlying soundness OF con-
dtions has been satisfactorily attested
| in the sustained strength of the in
vestment absorption of securities, There
| las been in the Investment market n
| good deal NOR" than merely seasonal
| demand. There has been = steady and
spreading inquiry for investment securi-
ties that undoubtedly corresponds with
| the solid basis which supports the legiti-
mate progress of general business
activity. But when expansion has taken
place In finance and commerce the situa-
! tion is very different from that which
| ohta aims In state OF depression and CON
traction, and 1t often happens that the
| cOrrectives Of liquidation and reaction
have 10 be applied in wall Street and
! out side Of ID IN order to restore balance
| between demand and supply
| In the stock market q change from a
| year ago has been plain for some time,
| Last January the market WAS full Of po-
| ;eutial buyers. Lately IL has been suf-
| foriug from plethora Of actual and po-
| 'ential sellers. Such liquidation and
| such declines az have occurred have been
tion Of equilibrium to market full of
stocks At given price level, stocks,
moreover, bought or issued To- sell to
others AT profit and largely held on
| borrowed money. This speculative po-
| sitiou has bcen and is upheld by the ris-
ing level Of real values resulting from
| the great augmentation Of the country's S
wealth and by the vast Lending capacity
| OF the banking situation, but 1t Is only
| AZ uew buying power is attracted that
| such a position il relieved
The enhancement Of real values In
now AN encouragement and incentive to
| purchases OF securities outright or on a
semi-nvestment basis, but such buying
| after expansion has taken place is very
| likely to await further opportunities
which may be- furnished by the necessi-
| ties Of speculative sellers, Experience
| has iauplt that oynrhnupbt ts