South Bend news-times. (South Bend, Ind.) 1913-1938, 1918-01-02
Review of 1917Stock Market
BY Thomson and McKinnon-

must not lose sight OF the effect. Of
all that was transpiring, on the for
tunes of that large and necessary
class of investors. popularity known
as spectators. the class that play
so large a part in maintaining
broad and constant market for our
securities That class who purchase
stocks and bonds on partial pay
ments. depending on their brokers
and bankers 10 finance their pur-
chases. This large and influential
class study intrinsic values, earn
ings. dividend returns. the trend Of
events and its probable effect on
values. They had either purchased
or were willing 70 hold their stocks /
when il reached a level of values
that appeared 10 fDe exceedingly at
tractive when measured 10y the usual
standards. This class was complete
~ taken by surprise at the constant
shrinking % values. and at the in
creasing supply Of stocks coming on
the market. They saw their equities
vanishing. Here was another source /
Of weakness. The involuntary Ii /
quidation by this latter class. who. |
conscious of the full worth of their
stocks. were. nevertheless. obliged /.
10 sell for fear Of a further loss re- /
sulting from causes entirely beyond +
their control or through inability 10
make further payments.
Banks Get on War Basis.
The banking position of the coun- .
try was also adjusting itself 10
war basis The banking resources
of the nation were being utilized TO
facilitate government business rath- F.
er than private interests. Loans on 4
stock collateral became difficult OF I
negotiation. CFunds for such pur-
poses became scarce and rates
high All realized that the govern /
ment and its needs must come first .
The stock market was left TO take
care Of itself as best It could.
one of the main disturbing ele-
ments of the year may be traced di- .
rectly TO a new policy outlined by
the president i'm relation to the
prices of our commodities. Under
the peculiar conditions existing. I
with a demand for all our leading I
commodities far in excess of sup
ply. prices were mounting rapidly. (
in many instances TO levels thereto
fore thought impossible. II became /
evident that something must be
done to regulate not alone supply
and distribution. but also prices. BY
a single touch of the magic wand /
in the hands OF the president. by the
authority of the great war power of
our government. the old esta bHshed /
Ia pf 10 Ia B
The law of supply and demand was
for the time declared null and
void. The constitutional right of
/ buyer and seller TO contract was
suspended. The new national policy
was: "One price to all. and that
price was a reasonable one"
Railroad An Irritant.
a constant irritant throughout the
year has been the American rail-
road. the largest. the most import
ant and the most completely regu-
! lated business in the country. The
/ extraordinary demands made upon
our transportation facilities found
/ them poorly prepared. Terminal
I facilities we're inadequate. rolling
! stock insufficient and a lack OF funds
/ comings A revival of discussions Of
! the past sins of the railroads can
/ serve no useful purpose now. What
! ever may De charged TO past mis-
( management, eX:ravagance, over
/ capitalization. unlawful rebatins.
| favoritism TO shippers, the fact re-
( mains that these were not the
! cause of the trouble of 1917. The
| nation, as well as every state, has
! provided a system of supervision
! through commissions. They had
| cured so many OF the ills that were
formerly complained of. Regulations
had been carried to the other ex-'
| IRENE. Rates were absolutely fixed
! by the interstate. as well as by the
| state commissions. but. unfortunate
~. there was no power to regulate
the price to be paid by the roads for
I what they required. The roads
were obliged to enter the open mar
ket and pay the market price. The
highly organized labor exercized
perfect control so that what they
demanded they usually received.
With constantly mounting cost of
operation and limited income. it
NdS merely q QutSllOn VI Lllllt " men
the railroads would reach the
point Of financial difficulties APP
peals we're made for increased rates
with negative results. At least the
interstate commerce commission
fully realizing the seriousness of
the situation and the necessity for
radical action. passed the entire sub
. iect with recommendation to con-
gress.
Believing the matter OF vital i'm
| DOrtaDce PreS't Wilson acting indie