The Caldwell tribune., 1916-09-29
Business and Finances
By w. S. Cousins, Editor American Banker.

New York, Sept. %, 1916.-Wall
Street may very quickly accommodate
itself to varying conditions in the
investment and speculative markets,
and most of all to prosperity. 1t is
now very apparent that the American
public has returned with increasing
vigor to the speculative markets and
millon-share days have followed in
consecutive order without single
break since the opening of the
week of September II. The operation
of bull market is nearly always the
signal for an upward swing in the
stock list, for at such time the bears
are afraid to sell short and as a con-
sequence the amount of stock on the
selling counter is proportionately re-
duced 1t is the simple operation OF
the old law of supply and demand en-
phasized in the case of certain special
ties by the big addition to earning ca
pacity. Experienced traders in Wall
Street have expressed surprise that
the recent upward movement has
been carried so far without sizeable
reaction for a breathing spell. Had
the public participation not been gen
uine, the professional element would
have found an opening or weak spot
to enable buyers to buy TN their
specia1ties on the downward move
ment.
Those who have been closely fol-
lowing the trend of events in the
numerical and industrial world must
admit that sufficient incentive has
been given to purchase prime securl-
ties as permanent investments. This
incentive has included the extraordi'
nary earnings of the more important
industrial organizations in many in,
stances translated into immediate
dividends for their stockholders
Others, however, have not been sc
fortunate, and many anticipated prot
it's have never been realized, though
hopes for the future are still very
bright. The latter deduction is th'
one which calls for a greater degree
of caution and conservatism thar
MANY people seem willing to exercise
: at this time, for there is no positive
method of determining when an up
ward movement has reached its eli
max. 1t is always safer to mak'
: haste slowly than to be compelled t.
5 hasten precipitously in an opposite
| direction.
People who are entering the stool
market in the present time OF excite
S ment should remember that price
l now are based upon two valuations
, assets and earnings and almost dali.
assets are being forgotten while wa
earnings are being reported. Unlte'
States Steel is the big war stock an
n has both asset value, leadership II
}, earning power and tremendous wa
!, earnings. The approach bf Bethlehem
;. Steel to its former high record prlc
i of 5000 per share has naturally stir
I red the emotions of Wall Stree
+ Bethlehem Steel heads the war babe
: in earning power and is rapidly con
! verting earnings into asset values
t Whatever the stock was worth a yea
e ago. it is worth between $500 an
# $500 per share more today, for it add
. this wear to its assets between $3U
and S4OO from earnings and has
n practical gift in the Pennsylvanl
1t Steel Co., which it bought for ver
little cash. 1t is only a question {
: time when Bethlehem Steel may b
able to show much higher .percer
l. taee of actual value than it does tc
= day
;e A gratifying feature Of the inves
ment market mas DeeH tllc Noi
demand for railroad stocks, despi'
the fact that the roads are now COZ
fronted with some of the most ser
, Gus problems in the whole history
r. transportation. But all these hand
70 caps are outweighed by the recolI
s. earnings of the roads. So long as tt
!. ;. domestic and foreign absorption
N American products keeps up. as
, present there will be plenty of bus
H. ness for the railroads, and earning
re viii not decline: and, insofar as IL
d effects of the eight-hour law are CO.
cerned, net earnings will not be a,
n n verscly affected until the first of Il
o, o, wear. 1t is believed in certain qua
III ters that between now and that tin
. number of remedial measures W
'J iJ be worked out that will either sa'
~ the roads from these new imposltio'
10 10 or provide method OF meeting the