New-York tribune., 1916-03-20
War Stocks Rise Violently
Movement Narrow, but
Markets Are Big.
ATTEMPTS TO EXCITE
SPECULATIVE FERVOR
Canada to Borrow S75,000,00O
Here - French Exchange
Breaks and Rallies.

With the excuse that our campaign
in Mexico, whatever might be the re-
suit, would probably lead TO large pur-
chases Of military supplies. an upward
movement was started in tho war
stocks last week that for n while re
sembled the excited advances Of 1918.
Announcement that the dc facto gov
eminent Of Mexico would not interfere
with our pursuit Of Villa and his ban
dts seemed 10 remove uneasiness over
danger that we might have the whole
population against US, and allowed
market enthusiasm full play. On each
Of tho first four days tho total of
shares changing hands was at least
around 100000 and Tuesdays turnover
was we'll above a million.
Stocks were sent higher, number at
their best going 10 or Is points above
their low prices OF the week before.
The familiar devices used 10 excite
public interest last year were again
brought into use. Rumors Of new war
orders from abroad. Of distribution Of
profits and of new combinations and
purchasing for control were put in cir
culation. Trading was shifted from
one group of stocks 10 another, and
each day saw considerable speculative
gains in some issues. Such advertise
ment of securities was effective last
year IN bringing to the market an I'M
mense public following. Last week
there was a material addition OF out
side interest. but The public was eau
tious, and purchasing of issues favored
in the speculation was not sufficient 10
prevent occasional setbacks when the
professional element sold to take
profits.
The market had been put into good
shape for an attempt to start a general
rise. The decline since the first Of the
year that eliminated in the sharp
break OF two weeks before had climi-
mated from brokers' books large
number OF speculative holders and a
good-sized short interest had been
built up. The week before had shown
tho market not easily shaken by bad
news or bear attacks and disposed 10
20 higher. The traditional period for
spring rise seemed about due. I'm
provcment last week in issues which
had been heavily sold on previous ad-
vances TO keep the market in check was
accepted as indicating that large inter
ests did not feel so greatly the need Of
caution.
Last Years Upturn.
At the beginning Of April, about a
year ago, we ceased TO fear foreign
liquidation. and Stock Exchange au-
thorities removed minimum prices,
which had been imposed TO protect us
from European selling. Immense eK-
ports. great orders for munitions. and
military successes by the Russian
forces in Galicia then started prices
upward in one Of the most remark
able advances in the history Of the
exchange. Great war orders were the
handspring Of the movement. Our ex-
ports have proved immense. Our in
dustry I'm general has been quckened
by the stimulus of business from Eu-
rope. We have received large quaint
ties of gold from abroad and have
taken our own and foreign securities
in payment for goods.
There is no doubt Of the immediate
gain the country generally has re
ceived IN supplying what the warning
nations across the water have needed
As 70 profits OF individual corporations
there has been much disappointment
Contracts received from abroad were
In many instances grossly ovcresti-
mated. Profits. particularly Of those
concerns which took up munition work
as new business, have generally not
bulked large in earnings reports
Prices reached by many issues at the
height Of the craze last fall could be
justified only II we were 10 continue
indefinitely TO make munitions for a
world war.
IN view OF the disappointment since
last years rise began, il is doubtful II
the public can be lured again into ex-
travagsnces OF quite the same kind
Accommodating funds in time OF good
business are apt TO flow into specula-
tive channels. Active markets arc rea.
sonably 10 be expected, as the quick
ening Of many lines Of activity In tho
spring appeals 70 speculative magma
tion. 1t is. however, not too much "a
hope that the public will show more
discrimination In what il buys.
In basic materials the war has
brought wonderful prosperity here. In
spite of an immense output, copper is
selling At prices practically without
precedent. and the supply abroad j,
scant. The steel trade has seen rec
ord high level Of prices, and in many
products each maker Is able TO s"t his
own figures. The report OF the United
Steel Corporation for the twelve
months ended last December showcC
how business had suddenly changel
from lean days 10 fat. For 1914 earn
ings were the poorest in the company
history. Last years total receipts from
all sources were over 1928. 100000, anC
there was shown a surplus Of s44.0 600.
600 in place Of deficit Of nearly Sl1,
900, 900 the year before.
This greatest Of our corporations ha'
boldly SGT out on increasing its capac
lty, giving token Of confidence tha'
when the war is over there will be-
sufficient demand here and abroad foi
the products 10 can supply. Forcigr
trade last year was the best the cor
poration had ever seen. although IL die
no munition work, and there are few
concerns better ftted 20 hold and ad,
TO the foreign trade acquired.
General business has so expanded
that trade authorities are az a loss fol
words 20 describe prevailing condl
tions. High wages and full employ
mcnt have increased purchasing power
and, now that the shock Of the war lr
Europe has worn OF, goods arc being
bought. This great demand coming "a
merchants and dealers who had 10.
duced their stocks on hand has caused
such a rush Of orders that prices are
soaring md railroads are clogged with
tra'flc. All this naturally might be cX
pected 20 bring purchases 20 the sccu-
rites market.
The break in prices since the height
Of tho war stock boom has made the
public timid. II may be that some such