The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1916-07-21

New York, July 15.-The July REIN
vestment, heretofore the most impor-
tant element in the mid-year financial
situation, has thus far failed to mater
ialize, and investment bankers report
a heavy decline in the public demand
for securities. This is somewhat con-
trary to expectations, in view of the
extraordinarily large interest and di-
vidend disbursements due investors
on July first Gas outlined in a previous
review, and calls for special examina-
ton into current conditions in order to
ascertain the cause thereof.
On the New York Stock Exchange
the selling pressure has been extreme
ly heavy, and the activities of the bear
element have extended from the war
stocks to the best classes of railroad
and the industrial shares. Liquidation
seems to be the order of the day, and
many stocks which are not sold by
direct customers orders are closed
out by automatic process of weak
margins and stop-loss agreements. In
view of what has been said of muni-
ton profits-and losses-and the dis
appointing net returns of our numer-
GUS temporary arsenals, it is not SUR
prising that the liquidation of the
war stocks" should continue unabat-
ed. The only wonder is, in fact, that
SO many of our so-called shrewd in
vestors have been willing 70 part with
their frugal savings for securities the
intrinsic value of which was problem
atical, to say the least
In such a market as exists at the
present time when stocks which nat
urally decline from 2 to points a
day in order to find their proper level
the natural effect is that of contagion
to their more substantial neighbors,
and thus a weakening undertone is
impaired to the entire market. 1t is
to be noted, however, that at such
times bargain hunters with heavy re-
sources are on hand to accumulate
good dividend payers on the down
scale with no consideration for the
present daily fluctuations of the
stocks. These are purchased outright
and locked up securely in the family
stronghold and continue to yield a
good dividend return pending the
next upswing. at the end of which the
speculative profits can be realized.
Many Of the wiser classes of Amer
lean investors regard the present as
the most opportune time for this
not to be disputed that some of the
more substantial industrials and rail-
roads, and even the motor and mining
shares which have been hard pressed
on the current break are cheap at pre-
vailing prices. Bargain hunters should
consider carefully the real value of the
property on which the securities are
based, and the earnings and business
prospects of such companies before
buying their stocks. This can best
be done with the assistance and coun-
sci of local banker. There are some
good bargains to be found, but the
man who buys because he has a tip
that a stock is going up and expects
to sell something that he is unwilling
to hold to another fellow at a higher
price is taking unwarranted risks. If
a company is paying large dividends
and is doing a conservative business
and the income yield from its stock
at current prices is per cent or more
in the case of railroads and 10 per
cent more in the case of copper
mines, it is good business risk to
buy such shares because the pur-
chaser can afford to hold if the mar
ket does not go up for months t.
come.
Many OF the recent war stock bulls
VINO proclaimed that any old COM
pany which could manufacture any old
thing required by the warning coun-
tries would make enough money to
establish them permanently as high
dividend payers are hedging their en-
thusiasm by buying railroad shares
More permanent loss than permanent
value is the score of some companies
which made large expenditures for
the manufacture of material for a war
which will not be permanent, and in
the case of many companies which
have made improvements which will
not improve the ultimate value of
their plant fro capitol account the
prospects of the promised returns to
the stockholders are extremely re-
mote. From their high prices of the
year the so-called war industrials are
down from 10 to 80 points, with ex-
ceptional cases where declines run
from 40 to more~than 90 points. In
deed, the losses have been so heavy
and the liquidation so extensive that
there are not few operators who
are now buying the more prominent
members of the group in the expec-
tation of recoveries, in part at least.
before definite indications are pre-
sented the European war is nearing
its end. In many of these issues
losses by spectators who loaded up
with them at fancy prices, even on
substantial margins, have been enor-
nous especially in zinc, chemical, mo-
tor and alcohol shares.
Much better reports come from the
bond market, in which recent buying
has been so heavy that it i. still diff
hcult. to supply the heavy demand.
Tor the more favored issues. A rise
OF 4 to 8 points in high grade bond
is not the normal course of the bond
market, and yet such increases have
been registered in recent months. The
average price of ten high grade rail-
road. ten second grade railroad, ten
public utility and ten industrial bonds
usually selected for statistical com
parison show an average rise of 3.ol
points since this time last year, and
the present average price TO be o4.O2.