The Bridgeport evening farmer., 1917-01-15
HENRY. CLEWS
WEEKLY letter

The stock market has not yet fully
recovered from the peace note effect.
During the interval there was a very
considerable rally from extremely
low prices, but no really permanent
recovery, 1t is quite apparent that
the losses thus incurred took OFF the
edge from the bull market and GRIP
pied many speculative operators on
the long side. It is equally evident
that larger owners Of securities have
not been ready buyers on the de-
cline, but preferred selling on the
rallies, although support generally
developed whenever decided weak
ness occurred. Unless appearances
are misleading, there has been persis-
tent inside liquidation in industrials.
especially the war group, upon the
ven-grounded assumption that there
Will be no such volume of munition
orders in 1917 as IN 1915. nor any
such profits. There is no denying
the fact that Wall street is disposed
to discount to some extent an early
peace AS already stated in these ad-
vices the mind of the world has dis
tinctly about faced and is now fix
I'd more on peace than war. The
Central Powers claim they desire an
eend Of war; for exhaustion and hun
GER are surely undermining some OF
the belligerents, and human endur-
ance is marking the, limitations OF this
ruthless destruction. The Allies in
reply. to the Central Powers have In
tinated the general basis upon which
they win discuss peace. Germany
may not listen to such proposals.
Mediation by neutrals at this time
would be offensive to the Entente
and a failure; so the war must go
on some time longer, or until both
sides come nearer together on terms.
Great Britain evidently does not an
>ticipate an early end to the war,
Judging by the fact that she Is about
to float another huge loan, the big
gest in history; no limit having as yet
been placed upon it's extent. Never
.theless, the growing desire for peace
is becoming more general on both
sides and will hasten its consumma-
ton, which may not be many months
away and is likely to come when least
expected.
The cessation Of war orders which
gave such an impetus to prosperity in
the United States would in any event
have come ere long as a result OF
lies in muntion manufacturing. Great
Britain was already practically pro-
ducing all her own munitions, and
partially supplying her Allies; while
only the other day British NUM-
ton firm made bid for supplying
this government with shells for one
of our own dreadnaughts at figures
much under American prices, The
amount of this contract was not par
ticularly important. but the difference
in prices was rather significant in
view of the necessity for increasing
our future export trade. Less than
half of the increase in our exports
during the last fiscal year was due
to munition orders, which in the mass
constituted only about one-third of
our total exports. The establish
ment Sof peace would reduce recent
abnormal shipments Of automobiles,
horses, mules, leather. copper, ETC.,
but these losses would be partially
offset by increases in cotton, petro-
leum, steel products for reconstruc-
ton purposes. machinery, and the
like. What the net losses would be
to her export trade, therefore, tit is
impossible to estimate, though pres
ent disposition is td considerably
overestimate them. The necessity OF
finding market for our surplus pro-
ducts. which will become more i'm
perative when conditions return to
the normal, is problem that will
have to be grappled with seriously at
no distant date. We must have eX-
port trade, and we must be prepared
to meet. foreign competition. The
worlds markets are comparatively
- 4Ina-, hot cI,
necessity will compel liberal pur-
chases by beIligerents and non-belli-
gerents; and unless the United States
is prepared to let slip its interest in
foreign trade. American capital and
labor must cooperate to maintain and
develop its proportion.
Stocks have occasionally displayed
a weak undertone, but have now evil
IDENTIFY turned for somewhat higher
range. War industrials of course al
ways sag the most on peace prospects.
Prices generally were further unset
tied by anticipation Of the Entente's
reply to the Presidents peace note;
also by fears of disturbance in our re-
1ations with Germany in event of "a
ruthless submarine war; Discus
sion regarding the Adamson bill Gre
ated an unfavorable impression; as
did the argument on the constitution
atty of the law in which counsel ar
gued for the right Of the govern
rnent to fix prices. while these were
merely transient influences, they at
tracted unfavorab1e notice. But there
is another deterrent of a more per-
manent character working slowly and
silently; that is the tendency of cap
ital to seek better returns. In spite
of the enormous waste of the last two
years, there is a great abundance OF
money looking for investment, and it
is obvious that there will be a great
demand for-new capital to replace
war losses and start enterprises long
deferred, not to speak of good pros
poets for continued business activity
at home. In view Of these demands,
holders of capital are naturally lin
cIined to insist upon better terms;
just as owners of commodities have
done, and just as labor has succeeded
in doing Such a tendency is, tenn
porarily at least, adverse to an ad-
vancing stock market. tending as it
does to depress securities having no
prospect of increasing returns. This
probably has something to do with
the refusal of railroad shares to show
the advance to which their improv-
ed condition entitled them.
Among the favorable factors in the
market are the abundance of money
and credit at reasonable rates, a
sound banking position, increasing re-
~Avyos continued large gold iypportS