The Bridgeport evening farmer., 1916-12-27
HENRY CLEWS
 WEEKLY LETTER

koverned entirely by peace possloil- ties. The frank desire of Germany TOT peace. has been freely admitted; wnlie the iirwiihngness of the Aihes to grant peace upon any terms "h1cn Germany would likely accept was eduai1y recognized, and the posslplllty of peace therefore appears to' De stlll remote. MT. wilson's attempt to mas ten proceedings by asking the belllg- erenfa to name their terms may prove to he Of some influence. or it may not. It,.is to be devoutly hoped that the President will be successful in this ef- fort. hut the outcome cannot be lore told at this writing. The Secretary or :. states outspoken statement about th1s 1 cotintry's Ax posed condition brought to 1 thA front new situation which proved l sAffoalsly confusing in the stock mar 1 ket. The M" stocks received sharp blow on be1isl that their extraordl- 1 nary profits had reached their high point and must in future decline, II not altogether stop before many l na6atfls expire, Inside selling, profit taking, forced Iquidat on. powerful bear raids. and. discriniin ion py banks against such stocks as collat- l eraJ4 served to intensity the decline, which at times reached the; point of I positive demoralization. The situation was further mystifed by activities here on German account. Among thkse was the announced preparations I of the, two great German trans-Atlan- ! tic lines to- resume service upon snort l notice, :. if necessary German ex- | chAnAe advanced sharply. Wheat de- clirled upon war developments; so likewise did cotton, copper, lead and i csftain other commodities In short, the whole trend of both security and i commodity markets showed the be- i gining of a, a,general movement to dis count peace.
 The point of view regarding the war has completely changed. All minds l are now turned towards peace; hence the collapse and seni-pantc in many ] of the indtistrials on the Stock Ex- i change. The decline, however, was ' chiefly the result of an overbougnt market, which induced fresh caution i in banking circles. a sharp calling in ! of loans and forced liquiGation of i weakly margined accounts. The se- we're fall in many shares would seem l, to be Unreasonable and out of ap pro i portion to changes in intrinsic cQnd1- | tioi1s or values. Success on part of the bears made them exceedingly ag- gressive, and their raids resulted In Lshfftine large amounts of stocks from 7 weak into strong hands.
 Liouidations of stocks certainly re- lieveds the money market, and the sit l uation in this respect is much better than when the Federal Reserve Board warning was issued several weeks ago. Reserves >~Qf Clearing House banks should show considerable inn ] provement /in consequence of a con- traction of loans and gold imports. Additional shipments of the precious metal amounting to $14.700. 600 arrived last week from Canada, making total imports of $61S, ,700,O00 since January l. Our banking and credit situation IS generally sounl, and whatever cau- taon may have been exercised by the Banks has been for the purpose of re- 0fraining excessive speculation rather than from any lack of confluence in 0heir own strength. The national
 1nks, it may be safely affirmed, are in an exceedingly satisfactory pdsi- ton. <
 The railroad outlook is promising, earnings both gross and net showing; very: encouraging signs. Traffic con- tinues heavy, and the scarcity of cars, though less acute, is still an impedi- rtent which cannot be effectually dealt WAtu uAAlA IHc SuPply IS 1LCISdScu OI trAfdc diminished. Of the latter there are no symptoms at present. Contro- veksies over the Adamson bill and
 1Toetion with labor are among the shadows under which railroad man. agers are laboring. Nevertheless, the eHt1fOAd outlook is brighter than it has been for several years and the manner in which these shares have resisted recent weakness in the stock \ market proves the more favorable opinion in which they are, now held
 On Thursday the market made a. sensational break and transactions amounted to over 3,O0o, 1000 shares. d- qufdation was greatly intensified by exhausted margins, and the heavy selling on Western account Presi- dent Wilson's note urging the bellig- erents to name their peace terms caused some uneasiness at first. but was subsequently, better received as 1t became evident that it would not provoke friction with any of the na- 1 ttons at war Much more concern was felt over MT. Lansing's intimations
 that this country was drawing nearer to the verge of war; owing to the persistent interference of foreign DOW
 CTS with the rights of neutrals. The alarm which this caused had much to do with the semi panic which occur red on Thursday afternoon, and the
 decline was only partly checked by the more assuring explanations which came from the same source later in the day. Whether the liquidation has run,itsscourse or not is difficult to say atsthfs writing. Some weak spots which successful bears may be tempt ed to uncover still remain On the other hand the speculative situation l1as,,b been greatly improved by the re- cent 1iduidation; there has been much good buying at the lower level and many desirable stocks are selling really below intrinsic values. The drop. in prices since the present fall in values began about a month ago when I commenced to urge caution and discrimination in the selection of stocks to buy. Since which the fall in prices has been unusual, and that no serious consequences have follow ed is substantial proof of gen. eral soundness in the financial situa- ton. Strictly war industrials will, of course, be in more or less disfavor from now on, even If peace is defer red For the better class of indus trials not dependent upon war profits