New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-01-10
REVIEW OF THE
FINANCIAL WEEK
War FaVOriteS Suffer as
tic Submarine Crisis
WeakenS Stocks.
BOND MARKET SEES
NO JANUARY BOOM
Our Industrial Expansion Not
Vet Initiation - Sterling
Nearer Normal Levels.

liere came report OF tne sNhlUg %
the Persia. with the death OF an Amcri-
can citizen a revulsion of speculative
sentiment WAS 20 be expected. but II
did not come at once. On Monday a
determined strength appeared in sccuri-
ties. and after dealings of upward Of
a million shares the market ended only
a tr.fe lower. Such advancing prices
on bad news have been seen before
when powerful interests refused TO a.
low a market campaign 10 DE inter
Tupted.
For the rest Of the week until Fri
day such show of strength as was
offered carried less conviction, being
for the most part in few chosen
issues that were sent 20 higher levels
while evidence of selling appeared else
where. Finally, when the word came
that the submarine question seemed
less serious there was considerable re-
covery. AS in former times OF tension
since submarine attacks have threat
ened to disturb our peace, the great
mass 81 owners Of securities refused
10 become panicstricken and unload
their holdings, and this prevented any
wide break Lack Of speculative pur-
chases from the public and bearish
disposition Of traders meant some re
action. principally IN the industrials'
which have been advanced 90 heights
justified neither by dividend returns
nor by known earnings.
Tho difficulties Of the Canadian Car
and Foundry Company, whose stocN is
dealt in on the curb added 10 the as
favor in which war contract and siml-
Is~ issues were viewed. The company
Nod taken an immense shell order from
Russia. With some trouble over de.lN-
cries IL found itself short OF working
capital and had 10 apply 20 the Rus
sian government for funds. drop o.
20 poiuts i'm the stock in a single day
was the trading response 20 TINS IN
favorable development. Advances on
signing contracts and prompt paymen'
on delivery had, it had been supposed
removed war business from moneE
troubles This plight ln when the "a
madam concern found itself was con
siderable o. q bow TO the war group
particularly as III contracts had so
much to do with the boom I'D 'ue'V
issues in tho summer
Banks and the W ar StoChs'
Shifting OF funds at the beginning o.
the wear usually means a temporar!
hardening Of rates for collateral loans
as dividends and interest are dlsburseo
and mercantile settlements are made. =
cali for mart Of the proceeds OF the
Anrlo-French loan last week was
add. d 20 the seasonal need for money,
As q result some loans were called ana
call money early in the week rose u d"
per cent. higher than II had been SINCE
the beginning of 1918. Lending lhslI-
tutions took advantage OF TINS occasion
10 discriminate further against NOUS
trials which had not become hrmiy es-
tablished al high prices. ms 100
added 10 the insecurity OF the market
position of recent speculative iaVorlleS,
The general list, however, did wen
when all this is taken into considera-
ton. Some industrials, Il Is true, maze
considerable losses during the week
ond foundation in such issues was on
a fairly large scale. he more sIaplg
mart Of the list resisted with a good
deal OF success the tendency toward re
action. Railroad stocks that offered
rood return and preferred stocks OF
no better industrials were bought Tor
Investment In spite Of European sell
Ing. actual and expected, losses in such
issues were comparatively small.
No Rush to Buy Bonds.
Purchasing Of bonds was disappoint-
inc 10 those who had looked for a rush
Of new buying in January. ihere was
a GOOD. steady demand. but the volume
Of business Mt the bond houses was
small. particularly when compared with
that Of November, whom bond houses
themselves were buying. II may b.
that investment demand will grow be-
fore January is over. A state bona
sale toward the end OF the month, IN
view Of the favor iu which such issues
are REGARDED should be "a notable nc
cess. and before now such official tnanc-
inc has enlivencd the whole market.
Tn. ubmor.ue dispute has probably
much less 20 do with the quiet lu in
ves.men. circles than It had w"r
di.incl.,at,on 20 make speculative nur-
chasos of stocks. II our foreiPn com
pica.ions become acute. 80 that the
country is convinced that serious DIM
Guilty is inevitable. then the bond
houses expect purchasing 10 be inter
rupted. but az present they see niue
20 indicate that such apprehension D.
affecting their sales.
Some cause for hesitation doubtless
arises from the movement IN Great
britain 10 force out American securl-
ties. Last summer. when the az per
cent British war loan sent back such
Il mass Of our obligations, there was
great opportunity for the bargain
hunter. Then the bond market here
showed that il was not alarmed b. CON
cessions in prices of good bonds, but
held on 20 what IL had and took the
offerings as they came. That such OPP
portunities Will be presented again IS
not generally believed, but until 1t can
be seen just how our issues come back,
many intending purchasers may be eX-
pected to postpone their investments.
The Question of Initiation.
During the week there was raised
rather definitely the question az TO
whether the expansion of our business
had reached the point where u could
be termed imitation. Lowering reserve
requirements Of national banks and ad-
dition 10 our gold holdings OF around
$3.50 900. 900 from abroad and nearly
500. 900 600 mined at home with lnslg-
niacan. losses through export. has been
followed by some advance in commod-
ity prices With warning Europe
either off the gold basis or holding in
securely 10 that source OF strength,
there has been a greater rise Of prices
on the other side. Consequently there
has not been the normal increase in
sales Of goods here and decrease In
foreign purchases to correct this
change in the level of commodity
Higher wages and labor troubles