New Britain herald., 1916-09-30
Henry Cleus Weekly Letter
Especial to the Herald. )

of substantial prO11t-taklnS Dy large interests in the financial markets this
 week, new investment and speculative
 buying has ben sufficiently effective
 to more than maintain the Stock Elk
 change price level. On Saturday last
 the sales during the short session ex-
 ceeded the 1000, 0,Q00share mark.
 Mondays full days session contribut-
 ed a total of 2,300,000 shares. To
 duplicate such figures we must go
 back to the exciting times of 1907.
 They are suggestive of the enthusi-
 asm and public interest that at pres
 ent are prevailing.
 The main features in the general
 financial situation may be considered
 to include, CD the impression that has become so widespread that Euro
 pt>n liquidation of American securi-
 ties has approached close to the
 point of completion; CD that the
 termination of the war of Europe,
 devoutly as it is to be desired, does not promise to be one of the imme-
 diate probabilities; (3) the unmistak- able evidence of imitation in which aE
 our national activities are so freely participating; (4) the phenomenal earnings that are appearing in the of
 
 systems and equally great industrial combinations; and (5) the remarkable ease in the money situation and the fact that the financial requirements for marketing the crops have been completed for the season.
 As to the continuation of the selling by foreign holders. an interesting statement compiled under the direc- ~a D01o
 ware & Hudson Co.,, which was pub lished early in the week, is not an- tagonistic to this conclusion. MT. Loree shows that there were still held abroad on July 31, 1916, American railroad securities of a par value of $1,415, 5,62S,562, but having a market value of only s1,110,09 1000. One year previous-on July 31, 1915-tho par value of the securities held abroad was s2,223, 510 ,229, showing a reduc- tions of substantially, ss00,0OO,OOo, while comparing with a similar state ment on January 1 1915, the reduc- ton is close to $500, 900, 900. ,&-When we consider the large volume of se- curities returned to us during the Balkan wars, as well as the fact that MT. Loree's compilation refers only to railroad securities and does not in clude industrial, it is possible to ap- preciate in something like definite the trem endous power of that has been displayed by investors during the last few years. AS to the $1,100.00O 1000 market value of railroad stocks and bonds yet in foreign hands, there is apt to be some misapprehension as to- the volume available for further sales In the first place Holland and other neutral countries are participating on 3 scale quite in keeping with condi- tions at home in prosperity and in. faton as a direct result of the oppor- tunities furnished by the war. Dutch h olding are not likely to be further and unless the New York Stock Exchange price level becomes irresistibly attractive the holdings of American securities in other neutral countries will not improbably be fully if indeed not substan- tially increased, in the near future since it would be difficult for capi- talists in those countries to find more attractive investments than American railroad securities. Tn addition we must not forget the very large volume of mo bilized American securi- ties controlled by the British treasury under the deposit or loan part of its mobilization scheme. It will be recalled that S100,000,0O0 of such se- curities were deposited as part of the $500, 900 collateral for the s25O,- 100000 British loan so recently ar ranged with American bankers at this, center. Future loans of a similar character are understood to be in contemplation, to be arranged when needed. It is not unreasonable to assume that the collateral must be quite as attractive as in the transac- tlons yet to come. The British 1 chancellor must be prepared to con- tinue to include substantial part of l American securities as the security i for ensuing loans. Meanwhile. as the British treasury has merely bor- rowed, not purchased the securities in | question, there is slight probability of 1 their sale. Instead they are to be l tied up until after the conclusion of ] the war, when they will be returned | to their present owners.
 If it may be accepted as conclusive 1 that foreign selling is eliminating, an important point in railroad fin 1 ance has been reached. Our great lines are severely in need of new capital for improveme ents, l for extensions and adequate eouip- ment in order to place themselves in l proper position to conduct their bus mess as common carriers There has been no serious attempt by them to appeal to the capital market during l the period of European liquidation Any action of this kind would obvi- | ously have been unwise since 1t would l have meant competition with the cream of railroad investments, such l IS were so distinctly the feature of | foreign holdings. As matters now stand, however, if this competition l for the funds of investors is ending, railroad managers will find induce 1