New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-28
Monday, august q, 1917


persons were rash enough to sched
ule a bull market in stocks for this
month, because, they said, imitation
PRODUCED by our entrance into the
struggle to make the world safe for
democracy would inevitably bring
higher prices for commodities and
larger profits for industry, so that
speculation on a great scale would
develop. Like a good many other
stock market predictions, this one
perversely has failed to come true,
nor is there anything in sight to in
dicate that it is likely to be fulfilled.
Nevertheless, any one who spends
single day in the financial district
will hear it said a dozen times that
we are to have bull market before
long, "for the simple reason that, as
every one knows, new securities can
be floated to advantage only when
we have a bull market. Therefore,
tn insure the success of the next in
stalment of Liberty bonds the pow
ers that be will have to create a
boom in stocks" 1t is not a con-
yincing argument. AS matter OF
fact, what happens on the stock ex-
change will have little to do with
the success or failure of government
| financing, which is fortunate, be-
cause the outlook for anything APP
preaching a bull market at this time
is far from promising.
What seems much more likely is
that stock market dealings will con-
tjnue in small volume for a con-
siderable period, with little public
buying. The outlook is so much OBJ
scured by developments attending
the readjustment to war that all
save professional traders will prob
ably hold aloof from the market un-
til such time as it becomes possible
to attempt a forecast Of the effects
of the new order of things on Sc
curity values. At present few per-
sons have the hardihood to make
such a forecast.
Settlement of the price-fxing con-
troversy will eliminate some Of the
uncertainty, but for a long time
after prices are fixed it will be i'm
possible to tell just how the govern
mont's scheme will work out. And
p.ice fixing is only one of the things
tending to restrict dealings in Sc
c,rities. Assuming that prices are
fixed on the basic commodities which
will net good profits for the pro-
ducers, the investor will still be in
the dark, because, pending action
By Congress, no one can say for sure
Just how much profit will find Its
way into the pockets of shareholders
and how much into the Golfers of the
nation. When these things finally,
are determined problems quite as
important from the standpoint of
the investor will remain to be solved.
Labor shortage and unrest, for ex-
ample, might eventually prove to be
Of much greater Importance than
the taxation programme, for while
there is no question that the gov
eminent can obtain all the money
and credit necessary to carry on the
war, it may be difficult to keep in
dustrial plants fully manned and
labor costs within bounds.
And if all these things were salts
factorily settled the investor would
still have to take account Of many
ether factors in the equation. He
cannot ignore even war news, be-
cause while he must have faith in
the outcome of the struggle, current
news has bearing on the duration
of the war, and therefore is impor-
tant. Finally, the investor must be
prepared for the reaction of securi-
ties to a peace which may come un-
eXpectedly.
1t is just as hard to see how the
public can be expected to buy stocks
under such conditions as it is to
imagine that the "big interests" in
tend to try making a bull market to
help the fotation of the Liberty
bonds. Many large investors seem
inclined to convert their holdings into
the 81 per cent loan rather than to
add to their accumulations Of cor