New-York tribune., 1916-06-19
Stocks Inclined TO Work
Lower-A Fairly Good
Demand for Bonds.
RELIEF AT FAILURE
OF MOTOR MERGER
Russian Credit for $50,000,000
Proves Attractive-M0ney
Rates Continue Firm.

Selection by the Republican conven-
tion Of its candidate 20 contest the
Presidency with Mr.. Wilson met ap-
proval in banking circles. but failed to
bring any enthusiasm TO dealings in
stocks. The week started with rail
roads and concerns that might be eX-
pected TO profit through a protective
tariff higher, but in absence Of any
sign Of revived interest from the pub
lie. which The market had for months
been awaiting, the upward movements
were not continued, and after Monday
the course Of prices on the exchange
was hcsitating and irregular, with such
trend as developed toward lower levels
Bad news from Mexico toward the end
Of the week accentuated this tendency
toward reaction.
Railroad managers and men failed TO
agree on settlement Of the demands
for an eight-hour day, and the unions
are TO take a strike vote before further
discussion. This put a damper on the
railroads. which had for some weeks
been the best feature Of the list
There had been a good rise in the car
riers and comparatively little or thlS
gain was lost. but it was difficult 10
carry the advance further
For one day, Wednesd day, it seemed
as il the long predicted advance IN the
coppers might be at hand to bring new
life 10 the market. Concentrated buy
ing in a few producers. of the kind that
had recently brought the railroads into
trading favor and had been behind
some Of the most spectacular ascents IN
war stocks last year, started the group
upward There are. however, many
long accounts in the copper stocks
waiting TO be closed out on rise, ana
the amount offered apparently discour-
aged the movement. At any rate, u
died away, as had before so many ad-
yances in the red metal issues.
Auto Merger Abandoned.
Ever since we began 70 work out OF
the depression and uncertainty that
came with tho war across the water our
bankers have tried to preserve their
sense of proportion and 20 keep down
the natural tendency toward imitation
that came with the great gold imports
realizing that caution was necessary ln
taking advantage of prosperity based
on our customers troubles. Some cap
italization of temporary profits was in
evitable, and the long continued period
of low money rates and idle funds has
resulted in combinations and new in
corporations whose prospects are none
too certain. Such a merger as was pro-
posed in the automobile trade, however,
was rather more than conservative
bankers could tolerate, and there was
good deal Of relief when il was made
known last week that the project had
been abandoned.
In the depression of early in 1914 the
automobile trade faced q discouraglng
outlook The war started orders from
abroad and made possible domestic pur-
chasing as prosperity spread. As d re-
suit the earnings of some OF the auto
mobile producers have been eXtraordl-
nary, and the immense profits Of that
picturesque personality, Henry Ford, OF
Detroit, and the $50 dividend declared
by General Motors last year, brought
dustry into public notice. The course
Of motor stocks on the exchange and on
the curb has aroused speculative in
terest.
To capitalize this admittedly un-
usual condition. to merge producers az
the basis Of high prices OF the present,
seemed q risky undertaking, parucu-
larly in view of the fact that the in
dustry is comparatively new one and
its future is yet uncertain. The par
ticular combination that fell through
last week was especially Objectionable
TO conservative banking interests be
cause of the way In which II was
handled. An underwriting syndicate
was, according 70 announcement, heav-
lily oversubscribed, though there was
no definite statement as TO what wa,
10 be included in the new merger and
what prices were 20 be paid for prop
critics acquired Subscriptions from
the general public were being invited
in the same blind fashion.
Just what caused the abandonment
Of the scheme was not definitely stated,
but there was a general feeling OF re
lief that this reckless promotion had
not been permitted. Announcement
came before the opening Wednesday,
ana lL speaks wen TOT lIt way 4ll NlllNi
brokerage houses and banks have been
handling speculation that there was
scarcely a furry in the motor group
and absolutely no disturbance else
where.
Bonds Well Absorbed.
Business in bonds was a little bet
ter. and investment houses reported
some increase in demand There are
enough new offerings and still q sufi-
cient supply of British-owned issues
coming to the market to prevent an"
material hardening of prices without
greater addition 10 purchasing power.
Institutions are preparing IN advance
the reinvestment of their July Interest
which generally is completed before
the interest is paid
The higher return on money has
made banks rather slower in buying
bonds, but as yet has not gone far
enough 20 cause them 20 sell oblga-
tions they have ON hand. individuals
are absorbing new issues such as those
of Canadian provinces of fairly long
maturity, and are taking back the
more desirable bonds that London IS
selling.
Subscriptions TO the S50.0OOOOO Rus
sian credit. which has been the sub
t,e4 oF cu.I r~o+roef.d raUoffefrore