New-York tribune., 1918-06-19


sorption Of the better stocks and
bonds for investment. Buying Of
this character is not in sufficient vol
ume to exercise an important influ-
ence on prices from day to day, but
such accumulation, if long contiu-
ued, cannot fail eventually to
strengthen greatly the technical
position OF the market. For the
most part this investment demand
probably comes from those who look
far ahead and concern themselves
but little with minor fluctuations.
They buy securities because of their
intrinsic merit. and arc willing to
hold on indefinitely, regardless of
prices, as long as dividends and in
terest are continued.
Ordinarily this demand would be
largely satisfied through new foata-
ticns. but now the supply of fresh
issues is relatively meagre, and, be-
sides. there are so many uncertain
ties ahead that investors show de-
cided preference for the more sea-
soned securities. The demand is, of
course, limited, because the major
share Of investment funds is being
placed in the war loans, but there
is, and probably will be at all times,
considerable buying by those who
find it necessary to diversity their
Investments.
Some of the railroad issues un-
doubtedly are going into the strong
boxes Of investors, but mainly it is
the industrials which are being thus
accumulated. That is reflected in
the relative strength of these bonds.
At present the average price Of ten
representative industrials is we'll
above the level at which it stood at
the beginning of 1916, whereas the
average Of ten railroads shows a
decline of approximately ten points
in the same period, while five public
utilities are, on the average, fifteen
points lower. In general way the
price movements Of the three groups
synchronized up to the beginning of
this year, but since then the ten
dency has been divergent, the rail.
roads and utilities falling and the
industrials rising. The explanation
for the preference shown by invest
ors for the latter is probably to be
found in the fact that whereas the
margin Of profit Of the utilities and
railroads has been shrinking, that of
The industrials has increased enor-
mously, and, owing to the conserve
tive attitude Of corporate manage
ments in the matter of dividend dis
bursements, the industrial bonds are,
in many cases, better secured than
any one could have imagined they
would be three years ago.
There has been a great change in
Wall Street in the last few years
change that is not generally un-
derstood or appreciated. A broker,
in his market letter, discusses
freely the ethics of short selling,
with the conclusion that it is some
times immoral, and no one in Wall
Street is surprised. The Stock Elk.
change takes action to prevent "bea1
raiding," and it's restrictions NEE,
with almost universal approval. II
puts ban on rumors, and that, too
is applauded, even by the commission
houses that reap profit from the
stimulation which such rumors give
to trading. Not long ago an up
town merchant wandered into /;
brokerage house and asked if il
were not good time to buy Steel
The broker took him into his pri
vate Office, delivered a lecture OF
speculation, advised him to attend tt
his own prosperous business and in
vest the profits in Liberty bonds ane
told him not to trade in the stool
market at all. These things coule
not have happened lustrum ago
but they are almost commonplace.
now.
Wall Street is getting to be {
safer place every day-the legiti
mate part Of it, that is. Unfort
unately. it still is more or less fire
qucnted by swindlers who sell oi
and mining and motor stocks which
are valuable only in the imagination.
OF the unscrupulous promoters wh,
peddle them to an unwily public
and "Wall Street." place Of vagu,
circumscription, gets the blame fol
their operations. Thus it happens
that many Of those who write an,