Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1916-01-01
WALL STREET HAPPY AND RICH
AS YEAR ENDS WITH HARVEST
OF PROFITS EARNED BY MANY
Nearly Billion Absorbed in American Securi-
ties That Previously Had Been
Held Abroad
BY CHARLES R. BROWN

10 read OF the past. Financial interest
Without important exception wound u
the year 1ei5 with far better net result
than they at first expected. The generf
publics participation as we'll ms its ne
profit was probably larger than in an
year OF the Stock Exchanges history
There have been years of much create
n activity. But Il Is doubtful whether an
r. Of these years have been so completed
free from manipulation by big plunRers o
from clique operations OF a character tina
may be termed detrimental to the inter
ests of the Exchange. This In turn mean
that the commissions have been NOR,
widely distributed and that instead OF
few of the Stock Exchange houses con
Quoting the bulk of the transactions tn,
years business has been distributed
among the entire list of Stock Exchange
members who conduct brokerage bust.
ness.
What really happened last year was that
Wall street absorbed between $3.50 900. .O01
and si,000.o00.0O0 in American securities
that previously had been held abroad. II
Is necessary to name such wide range
as this because of the lack of definite, ac-
curate Information. The nearest approach
to positive figures is the estimate con-
tained In recent compilation by Mr..
Loree, president of the Delaware and
Hudson Company. who has had access to
the books of virtually all the railroad
companies in the United States that have
foreign stock and bond holders. Mr.
Loree In June last gave the results of
similar compilation. which showed that
the par value OF all kinds of securities OF
! American railways for latest dates at
which data were then available was
2,5I6. .40l.3i2. His later compilation shows
that as a result of errors this amount
should have been 1870, ,4O2, 363
Up to July 81 which is the latest date
OF his new data, there had been n reduc-
tion from these figures lin other words
nf
bringing the amount of railroad securities
on July 81 down to 1928 5.5l0,229 Every
body knows there has been tremendous
liquidation by European holders of Amer
lean securities since July 81. Therefore,
1t does not appear an exaggeration to
speak of 81, 900. 900 par value in Ameri-
can securities as having been returned
during the year 1915.
FOREIGN BAN REMOVED.
In so far as London is concerned a
large part of the selling undoubtedly oc-
CURED after the close of January when
the New York Stock Exchange commit |
tee rescinded the requirement that sales
must be either for cash or in the regular
way. that Is for next days deliveries |
This removed the bar on foreign selling |
and quite active liquidation on European |
accounts Immediately began. 1t kept up |
steadily thereafter, care obviously being |
taken to avoid placing too great a strain |
" q
OF absorption. During the early part of |
December this selling seemed to have
reached its climax owing to the news
that the British treasury was soon to
announce n plan whereby 1t would take
over either in the form of loans or by
direct purchase of British-owned Amer
lean and Canadian securities. The ac-
tivity of the selling was ascribed to
liquidation by interests in England who
did not wish to be bothered with the
red tape incidental to government
tr2nsaotion OF this magnitude and char
acter Now that the treasury's plan has
been officially promulgated, the opinion
may be said to prevail in international
banking circles represented here that the
effect will be the tying up OF securities
IN the future rather than their direct
sale. The British Chancellor has no OBJ
lection to further sales of securities by
British holders providing that the pro-
ceeds are at once relnvested in British
There. Furthermore. would
be no objection to selling regardless OF
he suggested reinvestment. for the eff
feet in stabilizing Sterling Exchange in
New York will be identical in the in
stance of importations of securities as in
the case of gold or merchandise.
he year ended. however. with the
h.,g exchanges we'll under control.
n with Sterling funds in the New
oniSlarket still selling at discount
ganade under Q per cent. Official rec
star the Department of Commerce,
le last two weeks OF December !
ed, show an apparent trade bal
- II favor OF this country for the {
us of close to 50. 600, phenom-
and altogether unexampled record.
ol..s is the combined result of large !
a. rfuction in importations as wen as the l
~ lnarkable increase in expectations, the !
! tier rejecting principally the enormous I
.ovement of war materials to the En- I
ente powers While this balance deals c
With stupendous figures. the offsets are !
large. y
Surprising as the statement may appear. L
nv balance sheet on foreign trade ac-
cunt that is drawn today suggests for
he year a balance against New fork. 4,
INVISIBLE BALANCES. I
There are. for instance, the usual in a
isibIe balances to be taken into consld- I
ration. such as the years dividend and d
interest payments on securities that are \
TIL held abroad or that have but re- c
emily been sold. Allowing for reduc- Il
Ions. owing TO the return of securities. 3
his item. which includes freight charges a
n merchandise carried by foreign steam 6
hip lines, as well as funds brought in v
NJ immigrants, etc. could well be $780, D
% 900. Meanwhile IL 81. 600 600 in secur- c
ties has been returned. and II we add T
he years net gold importations Of $780, v
10000 and loans by American bankers =
nd lenders generally TO foreign countries I
Z $500 000, 900, we have total offsets OF u
!. 800 900. Co., or an excess OF 500 0.oOo TO
e applied 10 the maturing of loans. ETC.,
nd 10 any overestimate that may be c
ontained in the value OF securities re-
urned by foreign holders.
The strength, enthusiasm and activity .
lhIch were the features OF the market
uring the year we're based. admittedly. 3
pom the unexRmpled expectations OF food :.
roduets and war supplies. The ground :
as produced phenomenal harvests. farm =
roduets showing total OF about Sl0,- -
o. 900 900. or fully 500. GOO In excess OF .
~. This result. coming as II does as =,
Ierely one OF long series OF favorable a.
'op years. produced a remarkable wave a.
prosperity in the granger sections of =,
.e country and permitted an accumula- \,
"a ~ actual capital available for invest \,
enf IN the same way new capital was ~
eated from the savings representing the n
ribnffon TO labor and In other forms Y
hich viii readily suggest themselves OF n
le profits on war contracts. Still further a,
the increase OF new capital that has n
suited from what has coneedediy been Ia
g successful speculation by the public IN
the VA stocks and more recently in h,
ilxoaa securities and the more eonserv- al
classes OF Industrial corporations. W
efter form OF capital accumulation In
- considered TO some extent prod hi