The sun., 1916-01-24

question now s not SO much a question
OF values rs a question OF the prices
at which the mass Of securities current in
the market, the largest amount by far
ever current and steadily augmented by
new promotions and the return of our
securities from abroad plus the inrorta-
ton or foreieu securities. can he accom-
modated In the investment fund and
through bank credit Investors are wary
or an extravagant pricing OF values aud
bankers are cautious about eXtravagant
estimates OF values for lending
In this particular we see the peculiar
effects Of an inhstionary period. We
can discern IN nar situation less OF ac-
tual imitation so far than OF inflationary
tendencies. but the tendencies we cannot
doubt. Initiation lessons the purchasing
power of money and investors are aC-
cordingly disposed to exact larger divi-
dend and interest yields than In normal
times just rs capital and labor are dis
posed to exact higher prices and wages
so as TO preserve the margin Of profit
and buying power. in consequence,
while infationary forces operate to push
securities too high in price. investment
requirements operate as drag 10 keep
securities ON price levels at which the
investor deems them profitable.
One of the anomalies Of the securities
market has been the celebrity and ease
with which non ividend paying stoclts
have scared TO fancy prices. while divi-
dend paying issues have risen slowly and
much less extensively. but the workings
of an tnf'ationary period throw good
deal Of light on these curious move
ments. On the whole the mass Of se-
curities. whether on the dividend list or
not, cannot be pushed too high in price
for ultimate absorption on something
like an investment basis at time when
buying power and borrowing power must
accommodate persistent additions.
In financial circles the feeling of con-
fdence Is strengthened by every indica-
tion that the stock market and business
expansion Is making progress under
brakes Underlying conditions are too
good to be spoiled by reckless optimism
which insists on a boom AZ all costs.
Looking little further ahead into the
year all intelligent observers can see
possibilities which advise the urgency OF
keeping the financial and business move
ment under control. The European war
is entering on stage of intensified
desperation and the outlook for domestic
politics Is stormy. Labor is restless and
contentious. Events as they unfold
themselves may not be calculated to pro-
mote continuous expansion OF volumes
satisfactory degree of profitable activity
may depend on the adjustments which
are made thus early IN the year.
Yet. although the stock market has
been slowing up and on the whole sag
ging because II had to. there is nothing
very dangerous in the financial and bust
ness situation. Affairs have at no time
got seriously out OF hand, even though
one market after another has tended
at one stage or another TO run away.
Imitation in practically all respects is
stll chiefly matter of tendency. a po-
tentiality rather than fact In the
stock market there has already been
some defiation OF swollen descriptions
II positions in any direction, financial
or commercial. have been overbough'
the menace is not great, for these posi-
tions are powerfully supported 10y the
large and accommodating profits OF aEri-
cultural. manufacturing and commercial
enterprise.
General business itself is booked M
with orders plentiful enough to carry
IL actively through many months OF I'M
certainty and test. SO far as the stock
market goes wall Street has never had
AN ovcrbough, condition which conceded
with such assurance of ample banking
capacity to accommodate collateral loans
investment interest endowed with ample
power to absorb securities AT relatively
moderate concessions aud with such &C.
tiial increase of values from the increase
Of trade and industrial prosperity.