New Britain herald., 1916-09-18
Henry CZeu1s Weekly Letter
Especial to the Herald)

markets have presented unmista ka bic signs of increased public interest and participation this week in both the di- rectiOn of investment and speculative operations. For several weeks there has been evidence of broadening ! tendency. But the immediate incen- tive for the period of enthusiasm that has so distinctly developed seems to have been the definite result of the
 Maine election. This result in many
 quarters is interpreted and accepted
 as a responsible forecast of the suc-
 cess in November of the political par
 ty identified with the advocacy of a
 protective tariff. Under current con-
 ditiOns the tariff prospects may be eN~
 pected to exercise an important bear
 ing on the price level of securities of
 our great industrial com mbinations
 Since the war began there have been
 phenomenal increases in our export
 trade not alone in the form of muni-
 tiOns, but also of peace exports to
 neutral countries that formerly were
 served by one or more of the present
 belligerents. All will cOncede that
 when peace is restored there is to be
 intense activity displayed by foreign
 manufacturers in the direction Of re-
 esta blishing themselves in former
 
 increased tariff rates at home can
 hardly Xe expected to check. PreSurn-
 ably our manufacturers, finding their
 export business assailed, then will en-
 deavor to concentrate more freely on
 domestic business. They become in
 this way more susceptible to tariff pro-
 lection.
 In this light the results at the polls
 in, Mo1, 1oc
 cepted quite widely as a favoring mar
 ket influence. In addition, industrial securities have been sustained by evil
 dencc of a growing belief that recent interpretations that the war will end in the near future have been to some extent modified Public officials in the Entente countries are to some extent responsible for this change since they have been advising against OVercOn- fdence as a probable fOrerunncr CT disappointment. If it unfortunately should prove the fact that war still IS to claim hundreds of thousands of ad- ditional victims it will mean that sup plies of munitions must continue to leave our ports to such of the belng- erents as can arrange for transporta- ton. Tn this way there is not likely to be a sudden termination of the for eign orders for American made sup plies such as has been so greatly feared and to some extent discounted in stock exchange circles.
 While not disposed to underrate the of such cOncededly adverse influence as the unrest in labor that is so nationwide at the present time, and is eXemplifed by the recent eight hour railroad legislation and the cur rent troubles in the local traction field, large market interests are in Cllned to base their transa ctiOnS on de- VelOpments of a larger character. There seems reason to believe, for in stance, that Sa far as direct sales al- the foreign liquidation of American securities resulting from Inc war has in a broad sense been VirtuAi- ly completed. Floating supplies abroad of stocks were freely disposed of during the Balkan wars. Whatever of them came back quite freely when the larger war, which has been so appropriately styled the War of Europe, began. After the floating supplies had been sold, investment holdings in Great Britain, which was the largest foreign holder of our se- curities, were first forced out by in- VitatiOns to deposit them with the l government Con attractive termS) and ! finally by imposing an arbitrary and | heavy tax on the incomes derived by | holders from such securities as the | government desired should be deposit l ed. Hence it seems reasonable to be- ieve that private holdings abroad | have in a large sense either been sold 1 outright or deposited with the Brit sh and French governments, for the T ,i, T nands upon it's nationals. There 7ln- loubtedly is a large volume of Amer | can securities still in the custody of | he British treasury. These, however, are not likely to be sold since they l nave a greater value if used as collat- ,ral for American loans. The recent | s25O. 100000 British loan is an eX- ample in this respect. Tn that trans action collateral having a market yalue of $500, ,0O0, ,00O was deposited to secure the $250, 0,O00,000 issue, thus providing a margin of twenty per cent Of the collateral one-third or $1O0,- 100000, consisted of American invest nent securities, which at once re- moved that important amount from the ,robab bility of sale within the t1HO- ear period covered by the loan. Meanwhile it is understood that the oan transaction in question was merely the first of a series of similar ,nes. The British chancellor has ex- ended the original mobilization cheme by applying it to bonds of neutral European and South Ameri- ,an countries that are in the posses- ion of British investors. The total yalue of English holdings of the spe-
 fife securities whose deposit thus has ,een invited is understood to be about B, ,000, ,00O,0 Manifestly such a luge volume of ScCurities-Which are o be borrowed from their holders by he British treasury, not purchased to be used as collateral or loans. Our own center is the most | natural ono to which the British