The sun., 1918-10-14

The conflicting movements OF security
prices witnessed last week suggested the
difficulty that the financial markets will
have in readjusting values to a peace
basis
| 1t was in some respects the most
extraordinary week OF tho war period,
with the markets exposed to every sort
OF ruinor from the impending abdlcation
or the Kaiser to a collapse of Austria
Hungary and the actual breakdown Of
GerInany's military machine.
These confused movements were not
unlike what was witnessed during the
highly sensational markets of July, 1914,
which preceded the outbreak OF the
European war. when German agents
were unloading American stocks through
Amsterdam and London. The process
had been underway for some time and
In the light of what Is known now about
the factors back OF that spectacular
movement 1t is clear that the most astute
judges OF speculative conditions were
wholly out OF touch with the situation.
| chco nehuluhtment.
Now the process has been reversed
and whatever the Justification for the
growing belief in an early cessation OF
hostilities. the obvious fact IL that the
markets, both here and in Europe, are
readjusting themselves to a normal basis
once more. It Is a highly interesting
movement. the very confusion of which
reflects the differing views that are held
concerning what Is likely to happen after
peace has been declared.
The breakup Of the huge military ma
chine which Germany has taken forty
years to put together will mean not only
the Gripping OF the worlds greatest war
weapon. but also the beginning of a
tragic change in the national life Of a
people who have been brought UP to be-
lieve that might always made right
when the great General Stan said SO.
Whatever the terms Of the peace settle
ment, therefore. the one thing certain In
that this doctrine will take its place
on the intellectual scrapheap that is
piled high with the theories which the
tragedy of war has forced the world to
abandon. But in this new order Of
things will Germany still be Germany?
Important Changes Ahead.
No one can say how many years Il
will take to answer this question. The
map of Europe is being remade and the
commercial Importance OF nations
changed. Wall Street Is engaged in
classifying its peace stocks Just as It
went wild over its wa stocks In the ex-
oited speculation OF 1916
Traders cannot now give vent to their
speculative enthusiasm. however. as they
did then, because the Government Is bor-
rowing all the money that the banks
used to lend on the security of stock ex-
change collateral Marshal Foch, how
ever. promises to become as important
a figure in the money market as he is
In the military situation.
Wall Street from now on probably
will witness the most picturesque strug-
gle that the war markets have seen, with
the adherents of Foch fighting to OBJ
tain the supplies OF credit which the
money pool committee says that they
cannot have A few more military VIC
tories for Foch may give the spectators
the best OF the argument.
There is reason to believe. therefore.
that the next few weeks will witness
very interesting developments in the
financial markets of the world. Berlin
Is having first class bourse panic on
Its own account. with such sensational
breaks In prices as occurred on the stock
exchanges of New York and London
during the summer Of 1914. The Bank
Of England Is adding largely to its gold
holdings In preparation for the heavy
requirements OF the reconstruction
period. when the British market will
share with New York tho burden of
financing the world back to a peace
basis.
The striking advance in Russian Sc
curities here. with the strength shown
, by the more prominent foreign Govern
ment issues. reflects the growing optim-
ism OF investment circles But this
movement did not go az far last week
as the London market went, owing TO
the unwillingness of New York bankers
to finance such speculative operations.
There has been a spectacular advance in
the oil stocks and q few other Issues
which have been classified as peace
l
shipping stocks.
Attitude OF the Public.
But the public was not an important
factor in the market because the brok-
ers could not AFFORD to take on new
speculative accounts. except in cases
where the traders offered exceptional
margin. The reaction In the so-called
war stocks. ranging from to IT points
since Bulgaria sought an armistice. has
been to some extent offset by the gains
during the same period OF from to IL
points in the so-called peace shares.
These counter movements have
strengthened the stock markets posi-
ton by eliminating the elements OF
weakness which grew out Of the over
, wrought speculation in the war order
Industrial shares. The market is, there
fore. on Arm ground and ready for any
thing that comes. 1t IL still a war
I