The Washington times., 1917-02-11
HESITANCY FELT IN
WALL ST. CIRCLES
German Situation Has Created
Feeling Of Doubt on Part
OF Financial Interests.
MARKETS POSITION STRONG
Pretty Well Liquidated Before
hand, Thus Creating Favor
able Technical Position.

IL IL n trite observation that the
fate OF nations, like individuals. hangs
by a single thread. Never. before this
week, probably. has the thread dang
led quite so closely to the noses Of the
present generation. and this fact
take away a good deal OF the trite-
ness. Since President Wilson went
bofer Congress to inform the country
that this Government could no longer
continue diplomatic intercourse with
Germany the people OF the United
States have awaited anxIously day by
day developments In the new German
program for the conduct of sub
marine warfare.
This new program IL q distinct and
fragrant violation OF the pledges
given by Berlin following the sinking
OF the Sussex. On several occasions
this week the activities of the under
sea boats have verged on closely II
not overstepped the narrow line that
divides peace from war. This care
less toying with fate eliminated in
the sinking of the British passenger
ship California and the reported out
rage on the American ambassador by
the Withholding OF passports from
him and his suite. How much further
the imperial authorities are prepared
to 60 II a matter OF grave concern,
but enough already has been done to
leave little hope that the issue can be
other than one OF open hostilities.
Technical Position Favorable.
This situation has enkindled consider
able patriotic enthusiasm from one end
Of the country to the other. and has in
spired a spirit Of cooperation and self
iessness directly reflected by the placing
Of Industrial concerns of numerous va
rieties at the disposal Of Warrington 1t
has impaired a distinct impetus to the
preparedness movement. At the same
time. It has left the people Of the nation
in a painful condition Of doubt and hesi-
fancy which is best indicated, perhaps.
by manifestations Of nervousness in
banking and securities circles. Those
who buy and sell securities have scarcely
known which way to turn. There was
nothing on which to base a course OF
action. Fortunately. the stock market
was pretty thoroughly liquidated in De-
cember last. and this fact made techni-
cal position most favorable for a crisis
OF the nature with which the country
is confronted. Moreover. there was
further selling prior to the diplomatic
break on the occasion Of the receipt Of
the German note on sea warfare.
The stock market. therefore. was well
prepared to withstand the recent snock5
to which It hasbeen subjected Outsid-
ers were pretty well sold out. and tie
trading was left largely to the profess
sinnal element. save for some scattered
selling by those few who had determined
to hold out and Il little investment buy
ing by bargain hunters. Meanwhile a
large short interest in many industrial
issues has been built up and numerous
buying orders have been put in by those
seeking attractive issues at bargain
prices should declaration Of war come
at last. Those forward looking persons
count on a sharp break II hostilities
should ensue. These circumstances would
seem to provide against any continued
slump Of broad proportions. no matter
what may happen. provided 1t Is not too
long deferred.
Different With Railroad List.
So much for the industrial stocks.
But the situation with respect to the
railroad list is not quite so encOurag-
ing. In the first place there is not
the large short interest in those is
sues TO act as a shock absorber in
the event of a break. There are large
foreign holdings, held ready to be dis
posed OF in this market should such
action become desirable, Of represen-
tatlve railroad shares, such as st.
Paul. New York Central, and others.
Some of these are owned by German
interests. Others are held by bankers
on this side as collateral behind va
rious entente loans. mainly British
and French. These constitute a men
ace that hangs over the entire list
There already has been some Ger
man selling. and the proceeds have
been invested in reichsmark exchange.
There have also been some transfers
OF funds to Germany. and this also
created a demand for marks here.
with the result that rates on Berlin
advanced sharply to above 90 cents
for marks. whereas before the quo
tations were in the neighborhood of
6T. and even lower at intervals. In
this connection il may be stated that
Germans here were also credited with
transferring funds to South American
countries. The revival OF gold ship
ments to that destination might, at
first blush. seem to bear out the re-
port. Something like S2.00O,000 went
to South America this week, and
smaller sums to Cuba and the West
Indies. but these consignments were
for accounts that had nothing what
ever to do with German interests. II
was stated in banking quarters. There
Is naturally a good deal of nervous
ness among German subjects here. and
this has been displayed for example in
the withdrawal Of money from the pos
tai savings banks. the rush for citizen
ship papers, and so on.
Need Uncertainty Removed.
What Wall Street wants and needs
il the removal of uncertainties, and
this it would welcome even though
the ultimate issue should be war be-
tween Germany and this country. Not
only the stock and bond markets are
being held up. but financing plans
are in abeyance. Business Is stag
nant. The longer something decisive
is deferred the more this country's
commercial life will be affected. So
long as adequate protection is not
afforded our shipping, there will be