The Bridgeport evening farmer., 1916-08-29
I... Finance. Real Estate Insurance =.
World M of Finance
Banker Clews' Weekly Letter)

!, (Banker Clews' Weekly Letter)
 I For q long period there has been
 l . strong speculative disposition in the
 stock market based upon trade ac- 1 tivity. easy money and war imitation. { Thus far this tendency has not had ! free play owing to the policy of re- stra1nt imposed by conservative bank ing interests; also to the steady pres-
 { sure of foreign liquidation which has
 shown Itself at every rally. More i over, there Is a feeling that present | abnormal profits are purely tempor- ] ary, and that any. undue speculation 1 based upon the assumption of their continuance might lead to disastrous conseqlfncess This week, however.
 outbresk of spJcSlaSike activity in ! United States Steel, International Mer- ! cantile Marine and Reading affecting I the entire market. On Tuesday this 1 activity assumed aggressive propor- I tons These secruities reached the ! highest prices on this movement, steel 1 making a new record, and the days I total sales ran over 1900, 900 shares; ] the three shares just mentioned con stituting about one-third of the days l transactions. The activity in steel was based upon the phenomenal earn ings of the company, which surpassed aH possible imagination and inevitably I placed the company in an exceedingly qtEpng position for meeting future 4nlergencies. These profits naturally X crAated belief that the company l cannpt indefinitely refuse stockhold- | egs af1arger share in present prosper l 14y. As for the future of the steel l tyade, 1t is recognized that war orders cannot last much longer, and 1t is N peace, not war, which in future must determine the basis of progress. Re- construction demands after the war will, as is already known, be enor- nous. NeitheH Great Britain nor Ger \ many will be able for some time to Ecome to meet the demands upon them from this source. The devastation of ! Europe will cause an enormous de- ], mand for steel to restore railroad ! plant. equipment. factories, machin- cry, etc.: demands which will not be 1 satisfied without our help. It Is also estimated that five of six million tons !sof shipping have been lost, displaced or worn out by the war. Great Brit ain has already suffered to the ex- tent of 4,000, 900 tons through sub- marines. depreciation and extra wear. Her shipyards will face a .shipbuilding boom after the war. Our own ship yRrds are overwhelmed with orders, and probably will be for two or three years to come. while shipbuilding plants are being started all over the world; all of which means a tremen- Esdous. demand for steel, so that the United States, much the largest pro- ducer in the world, will be called up- on to fill a considerable portion of this void. Prices may not continue as high as now, but with such demands Yin view, no great decline will be pos
 sibles Whetl lerl in eF orl peace, the
 next two or three years are almost
 sure to be periods of great activity
 in the American steel industry and the volume of business will be large,
 though the ratio of profits may de-
 cline
 While this is the period of summer
 quiet, the trade outlook is regarded as tsatisfactory. and this in spite of har- vest which promises to be below the ten-yesr@ average. Corn improved someWhat in condition last week. but cotton deteriorated further and prices again touched the high level. Our
 wheat harvest is now in full progress
 and prices of this staple are very, high.
 There is little doubt but that the prof. ats of agriculture for the current year will be exceedingly satisfactory. The < better outlook, however. is based more Fsupon our industrial activity than cropsA It must not be foreQtten that the whole country, especially the sec ton East of the Mississippi, is power- fully affected by war imitation, easy money, the enormous addition to our gold supplies, thte new Federal Re-, serve law and the great expansion of credit facilities, plus continued for. efgn purchases of munitions These are factors upon which our. present activity is based. and they promise to carry ms forward until their force is exhausted; contingency not yet in sight and one likely to be checked only by weakened buying capacity, which 1s probably many months awaya. At the same time, the stock market. through excessive purchases on the long side, had fallen into a somewhat weakened technical position. The large profits made in steel. Interna- tional Marine and some of the motor shares naturally induced an active realizing movement It is also to be remembered that foreign liquidation on British account seems to be invited by every sharp rise, especially in the
 railroad shares. The success of the recent British loan. while it will par
 tially relieve the pressure of foreign liquidation, Is not likely to cause it's suspension. The general market is in sound condition. and moderate re- action would undoubtedly improve it's position and stimulate fresh buying.