The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-01-07
FINANCIAL NEWS
AND COMMENT
Heavy Foreign Liquidation In
dicatcd by sharp Rise in
Exchange.
STOCK MARKET DECLINES

Trading In stocks was sustained yee-
tcrday on the scale Of activity estab-
lished at the outset Of The week and the
market continued rather more m
phatically the declining movement which
started on Monday. Spocialtics fell
most heavily. but the contraction Of
quoted values extended without discrlmi-
nation through all departments and in
cluded practically all descriptions. al
though for the most part the reactionary
drift was accompanied by exhibitions
Of a good deal Of underlying stability.
| The close was weak and practically at
the lowest Of tho day.
After canvassing the situation dill
gently for explanations OF THE course Of
prices contrary to the expectations with
which the new year opened. Wall Street
did not rave to look very far last night
for u,e that seemed to At this facts.
The progressive weakness In the share list
conceded with AN extraordinary further
recovery Ia sterling exchange. Dsnand
, bills closed at A.77a. up four rents
! since the beginning OF the week. and a
rise OF more II II w cents since
Wednesday morning. The connection be-
tween the stock market and the ster-
ling exchange market Was almost too
obvious to be mistaken. for It was
clearly implied that stocks were yield
ing to the pressure OF augmented liQui-
dalton of our securities in consequence
OF the British Governments programme
for a mobilization OF American In
ycstmcnts with which to finance wartime
purchases of goods and supplies In this
country.
There were other influences In the
Wall Street day. One OF these was the
disappointment of bunsh expectations
| respecting the January market. This
! disappointment conduced to an eApan-
sion Of domestic liquidation. The recent
revelations OF some OF the difficulty ex-
pericnced in making corporate profits
from war contracts entered into the
reckoning. AS did the uncertainty which
obtains TIE outcome Of the diplo-
matte controversies which Washington
has on its hands. symptoms OF tho TEN
per which Congress IL displaying and
Judge Gary's warning hat post-oellum
problems mus: always he kept In mind
In the prosecution Of prosperous activi-
ties at the present time were addition
ally conducive to unsettlement of Wal
street sentiment. Professional traders
took advantage of all this to carry on
bearish operations but II can hardly be
doubted that the principal factor In the
stock market Of late was more plainly
defined yesterday In the increasing vol
une Of the return of our securities from
Great Britain.
Sterling exchange hardly t~estiies to
anything save that British selling OF our
stocks and bonds has been expanding
materially. our export trade. even allow.
ing for the dearth Of shipping facilities
is making a large supply of sterling en-
| chang, hIf Judging from the Alarp
and sustained advance In sterling In the
past week alone remittance on L.ondou
would already be at parity were II not
for the volume Of commercial bills. The
conclusion is naturally drawn that the
quantity OF securities which Great Brit
ain is Offering in Vail Street is therefore
probably heavy enough 10 have over
taxed somewhat the capacity OF the
market to absorb them at rising prices
although not too heavy to be taken graz
ually at concessions
In some respects il Is apparently ind
ca,ed that this British selling Is heavier
Than al any time since the opening 81
the stock Exchange In December, 1914
II harper also that such realizing comes
OH "A position of some congestion oil
stocks In the market. which the broker
age community has long recognized, al
though the belief has been that the posi-
ton voulb naturally 10 renewed III tfnt
II there was no outside interference.
Wal stocks and spccialties were the
chief features Of weakness IN tine carr!
part OF the day. but heaviness in th'
afternoon was most pronounced in tn,
standard rails s.d industrials whict
make up the principal par: OF the inter
national list. United States Ste"
Throughout, the session MAS the object O
close attention, but IL declined most
~stubbornly. although the general con
81 ructiou placed on Judge Gary's state
men, taken in connection with the An
nouncemcnt of wage increases by thu
corporation vas that Wall Street migh
have been overcstimating the amount o.
the dividend which II Ia expected the
directors will declare on the common
shares at the end OF the month.
For the rest Judge Gary's remarks
were in line with other recen; utierance'
from representatives of important Inter
es,s suggesting the desirability or some
moderation Of the current pace of gen
era, business expansion. OF this II ma!
be said tina, anything OF the sort coult
ONLY be beneficial, and so far as TN
stock market is concerned the soundnes'
of Fundamental conditions will inevitabl,
conduce to increased buying on any set
back. Foreign liquidation can only ten
pararily inconvenience the market at tn
most. In the long run II conveys an as
surance OF support for our export trade
u, ~ Oh. Ary,n ., "a