The Bridgeport evening farmer., 1916-11-20
HENRY 'CLEWs
weekly Letter

tinue to be the important factor In the
security markets. Great Britain,
France and Russia are each standing
at the door Of our vaults asking Tor
funds to help carry on the war. Great
Britain has just completed a $30o,Ooo, :
600 collateral loan, and another big
loan probably on credit basis is NOT
many months distant. France recent
~ negotiated a $50,000,000 credit in this
market, and both these nations are
said to be considering the early feas-
I ibility of selling Exchequer and Treas
ury bills, which American bankers
would undoubtedly be willing to han
die. The Russian government will
also issue next week about $25,0OO,OO0
OF its new $50, 900, 600 loan, These OPP
erations are not loans in the ordinary
sense Of the term, and are small OPP
erations compared with the huge war
bills of these nations, being chiefly
ltEiiized to pay for the immense guam
lily of munitions ordered in this coun-
~ The latest British transaction is
sther collateral loan which will
I'13fbably tie up large blocks of for
ID -owned American securities Tor
d.Rsidera'blA period, thus lessen1ng
f*5&ign liquidation The next British
Il Is promises to be a strictly credit
df&ration. These foreign demands for
l&eSls bid fair to continue, since there
iS1no sign Of an early termination Of
the war, and both sides are displaying
more and more resolution and prepar-
ing for an even more desperate con-
fifct with the opening of spring. War
contracts, for which this country is
the chief outside supply, must con-
tinue; and payment will have to be
made in borrowed money. If we want
the contracts-and we dove will be
obliged to accept the loanE and the
effect Of these continued huge de-
mands upon our capital market must
be taken into serious consideration
when forecasting our financial future.
Home requirements for capital, it
should be noted, are increasing pro-
digiously;; our industrial plants and
railroads needing large sums for i'm
perative improvements and expansion.
"A great deal of new capital is already
being furnished out of current large
profits, although in many instances
these cannot be depended upon for
meeting such demands, especially in
case Of railroads and other corpora
lions which are not profiting abnor-
mally from the war. There are vast
amounts of capital seeking invest
ment, but the combined requirements
Of domestic and foreign origin are far
beyond all precedent and must soon
tend to reduce our supply. Inevitably
capital will ask and obtain better
terms, and interest rates must conse-
Quently rise in due course of time.
Such a movement will naturally be
slow and its workings cannot be al
ways discernible, but the trend In that
direction Is unmistakab'e aud unavoid-
able. One result Of these conditions is
the weaker undertone Of foreign bonds
owing also to continued enormous Of
ferings
Stock market conditions are greatly
confused by the variety Of extraordi-
nary movements. There is no doubt
about there being considerable liquid
alton in some of the industrials which
have risen to dizzy heights, or that
stocks are steadily passing from strong
into weaker hands; also that the tech
nical position of the market is not so
invulnerabIe as it was six months ago.
On the other hand there is no abate-
ment in Industrial activity; demand
forg commodities in almost all direc-
tons exceeding supply as a, result Of
the waste of war. The scarcity Of
food is emphasized by efforts of Eu-
ropean governments to control sup
Aplies, to keep down prices and to
avert consequent public discomfort. In
our own country the increased, cost of
food threatens social and political dis
turbance:{ and no relief can be antici-
pated until the next harvest. It mat
tiers little whether the farmer or the
middleman is gaining most by high
prices The consumer Is paying the
bills. and relief can only be obtained
by increased production or decreased
consumption, the latter merely par
tial means of relief through economy
or substitution. The same condition of
scarcity exists in other divisions of
industry than agriculture, even in a
more marked degree; though the eff
fects are less disturbing than when
the human stomach begins to suffer-
Steel prices have again been advanced
and steel rails, which nobody eats but
everybody uses. touched $40 a rise Of
IS. AS result the upward movement
In steel shares received a fresh impe-f
tus. Copper also advanced into higher
attitudes: cotton followed in the same
track, and so the circle continues its
unbroken swing. AS before said, there
is nothing yet in sight to stop this rise
in commodities except exhausted buy
ing power or increased supplies.
neither Of which are much in evidence
at this time. Nevertheless, reaction
airy symptoms are not wholly absent.
Increased costs are already having
the double effect Of emphasizing econ
omy among consumers and diminish
ing producers, returns. In all prob
ability abnormal profits have about
reached their zenith: the increased
costs OF labor, materials, transporta-
ton, ETC.. being an offset of growing
Importance. A fresh complication de-
veloped this week in the movement of
the railroads to test the constitution
atty Of the Adamson railroad bill in
the Supreme Court of the United
States, the outcome Of which must re-
main in doubt for weeks to come. A
strike. however. seems improbable, for
the reason that 1t would incur wide-
spread public disapprova1 and both
sides are interested in having the law
interpreted by the highest authority in
the land.
: The two sets of conditions under
which the market is operating may be
summarized as follows: In favor of
an advance: continuance of the war.
high prices for commodities, big prof
its Of munition industrials, abundant
capital and credit, a clearer domestic
political outlook and a rising speeu1a-
tive fever. Against the advance: in