New Britain herald., 1917-01-13
Henry CRws ,
 Weekly Letfer
Especial to the Herald)

market has not yet fully recovered
 from the peace note effect. During
 the interval there was a very consid-
 erable rally from extremely low
 prices, but no really permanent re-
 covery. It is quite apparent that the losses thus incurred took off the edge from the bull market and crippled
 many speculative operators on the long side. It is equally evident that larger owners of securities have not been ready buyers on the decline, but preferred selling on the rallies, al- though support generally developed whenever decided weakness occurred. Unless appearances are misleading, there has been persistent inside H-
 quidation in industrials, especially the war group, upon the well-grounded
 assumption that there will be no such volume of intuition orders in 1917 as in 1916, 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 advices the mind of the world has distinctly "about faced" and is now fixed more on peace than war.
 The Central Powers claim they desire
 an end of war; for exhaustion and
 hunger 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,
 timated the general basis upon which
 they will discuss peace. Germany
 may not listen to such proposals. Me-
 diation by neutrals at this time would
 be offensive to the Entente and
 failure; so the war must go on some
 time longer, or until both sides come
 nearer together on terms. GreaI
 Britain evidently does not anticipate
 an early end to the war, judging by
 the fact that she Is about to float an-
 other huge loan, the biggest in his tory; no limit having as yet been placed upon it's extent. Nevertheless, the growing desire for peace is be- coming more general on both sides and will hasten it's consummation, which may not be many months away and is likely to come when least ex- pected.
 The cessation of war orders which gave such an impetus to prosperity in l the United States would in any event have come ere long as a, result Of l the growing independence of the AL | lies in munition manufacturing. 1 Great Britain was already practically ] producing all her own munitions, and partially supplying her Allies; while | only the other day British mun1- 1 ton firm made bid for supplying l this government with shells much | under American prices The amount of this contract was not particularly ] 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 intuition orders, which in the mass constituted only about one-third of our total ex- ports. The establishment of peace ! would reduce recent abnormal ship I ments of automobiles, horses, mules, leather. copper, etc, but these losses | would be partially offset by increases in cotton, petroleum, steel products 1 for reconstruction purposes, machin- l cry, and the like. What the net losses would be to her export trade, therefore, it is impossible to estimate, | though present disposition is to con- siderably overestimate them. Our most serious difficulty in maintaining our export trade will be the high cost of production in this country com pared with Europe. The necessity of | finding a market for our surplus products which will become more im- perative when conditions return to the normal. is a problem that will have to be grappled with seriously at | no distant date. We must have export trade, and we must be prepared to
 meet foreign competition. The worlds l markets are comparatively bare of
 merchandise so that sheer necessity
 will compel liberal purchases by bel ligerents and non- belligerents; and
 unless the United States is prepared to let slip its interest in foreign trade,
 American capital and labor must CO., operate to maintain and develop it's proportion. Stocks have occasionally displayed a weak undertone, but have now evil dently 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-
 lations with Germany in. event of "a
 ruthless submarine war; Discussion
 regarding the Adamson bfll created an
 unfavorable impression; as did the
 argument on the constitutionality of
 the law in which counsel argued for
 the right of the government to fix
 prices. While these were merely
 transient influences, they attracted un-
 favorable notice. But there is an
 other deterrent of more permanent
 character working slowly and silent
 ly; that is the tendency of capital 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 ob-
 vious that there will be a great de-
 mand for new capital to replace war
 losses and start enterprises long de-
 ferred, not to speak of good prospects