The Washington herald., 1917-11-17
"SILENT PANIC"
HITS AMERICA
Holland Says Nation Has
Been Experiencing Pecu-
liar Market Condition.

It is one or the queer phenomena,
Of which there have been many in
the securities market for a year or
more. that this market seems to be
fnstantly affected by reports which
come from Russia, one day marking
up quotations for securities because
there seemed to be a brighter outlook
in Russia and the next day marking
quotations down, thereby rejecting
anxiety caused by what seems to be
unfavorable news from Russia
At the same time, the ablest bank
ing authorities here and elsewhere,
and. it is understood, some OF the
leaders in the administration at
Washington, have not wavered in
their belief that Russia is only pass
ing through an inevitable time of
turmoil and readjustment but will
ultimately find herself and at last
establish, as France did in 1S1. after
the anarchy Of the Commune a stable
government
For instance, when some days ago
the securities market was greatly
depressed because OF very unfavor-
able reports which came from Rus
sia, Thomas W. Lamont. of ]. p. Nor
gan & Co.. spoke for publication in
ecouraging words, voicing what
seems to be the sentiment of those
who are looked upon as leading
bankers with respect to the favor
able outcome by and by of the Rus
sian situation. So also Henry P.
Dawson, who has been lent to the
Apeople by ]. P. Morgan & Co, so
that he may perfect an adequate
Red Cross organization, spoke in
words of encouragement respecting
the Russian situation, clearly inti-
mating his belief that Russia is
slowly, with difficulty and yet sure
ly. finding her way to stable gov
ernment
The administration at Washington
appears to be persuaded that Russia
Is not lost The great orders which
have come from Russia for supplies
of various kinds and for railroad
equipment are not to be cancelled
nor will the Treasury Department
turn its back on applications which
may hereafter come from Russia for
financial assistance.
Yet in spite of the view Of men
who know whereof they speak and
whose Judgment is entitled to care
full consideration. holders of securi-
ties are persuaded every time some
what unfayorable news is received
from Russia to sell their securities
at depreciating prices.
There seems to be no doubt that
real values. far exceeding those
which may be represented by mar
ket quotations. are to be found in
American Industrial properties OF all
kinds One security not long ago
found a market at nearly 200 and
was quoted the other day at 1O5
This is regarded as absurdly dis
proportionate to the real value which
is in this property. The business it is
doing is colossal The corporation
has been able to concentrate its at
tention upon many commodities of
= which the government stands in need.
It is realizing reasonable Isofits and
its future is assured when peace
comes. Yer-some of the holders of
the stock OF this corporation, appar-
emily being frightened. have been
willing to sell it at constantly de-
preciating prices until at last IT is
only a little above par.
U. S. Steel Corporation.
1t is evident that the managers of
the United States Steel Corporation
have abundant confidence in the
strength of the corporation and in
it's ability to maintain it's very high
ly speededup production until after
the war. Then when peace comes
the steel corporation will be greatly
occupied with the manufacture of
various commodities needed in the
United States, and especially in
Europe, where there must be enor-
nous upbuilding Of Industrial plants
-NV-rV rF W.
by reason of fright and the appre-
hension that the situation in Russia
is to be so chaotic that true anarchy
will prevail there for a long time.
Many persons who possessed COM
mon stock of this corporation have
marketed their shares in such
amounts that now the stock is
quoted some points below par. Those
who are qualified to judge are con-
WINGED that the quotations recently
made in the securities market for
the common stock of the steel cor
poration are simply absurdly low
and that there is really greater
value in the property today than
ever before.
Day of Liquidation.
Occasionally the opinion is express
with the securities market conditions
and the course Of the stock exchange
in the past that We have been pass
ing for the past three or four months
through a period of what they call
silent panic" From one point Of view
this opinion Is correct. There has
been something like hysteria mani
Tested by many Of the holders of Sc
curities. But in the real meaning of
the term panic the conditions which
now prevail are not applicable. There
is money In plenty although 1t can
be obtained only for reasonable not
speculative, use. Domestic business
is enormous. The department stores
in New York City and 1t is reported
in other cities have been thrOnged
this autumn with unsurpassed crowds
(of customers. The railroads are
carrying greatly increased numbers of
J passengers. High prices for food COM
modities do not seem to curtail pur-
chases and the reports which tell Of
the harvest, unsatisfactory as the
wheat harvest has been, have inspired
great confidence among bankers and
business men. For instance, the latest
report from the Northwest estimates
that the money value Of the crops
harvested by the farmers there in
1911 Is considerably in excess of 8, Co.,
10000. These harvests are to be turn
ed almost instantly into cash. The
farmers win have money in plenty
and what is true of the Northwest is
relatively true of other agricultural
sections.
The Federal Reserve Bank system
is handling the extraordinary financ-