The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-09-22
FINANCIAL NEWS
AND THE SITUATION
Effect of Labor Disputes Is to
Unsettle Sentiment of
Investors.
MONEY SITUATION EASIER
Strong Features Exceed Weak
Ones in Underlying Mar
ket Conditions.
MONEY SITUATION EASIER
ny WILLIAM JUsTUs Bo1Es.

changes In highly speculative shares are
The movement of last week
showed that the impulse was chiefly
professional and that the public had
practically from the market.
for the time being at least, which ac-
for small liquidation that took
place and continued absorption of sea-
soned securities whenever prices reacted
and there were signs Of weakness.
Relative firmess of security prices in
the face of serious labor disturbance
test!fies to soundness of underlying con-
ditions and an abiding belief of the
people in sustained expansion of Am
erican industry. That feeling has made
thousands OF investors retain their Sc
curities. Notwithstanding decline in
prices and uncertainty of outlook.
The public takes the view that the
country will enjoy a prolonged period
of prosperity whether the steel workers
strike or not and that underlying condt
tons are much more satisfactory than
they usually are at this season Those
have impelled thousands
of security holders to hold on to their
investments, notwithstanding social I'M
rest and activity of labor agitators in
advising industrial workers to insist
on extravagant wage advances and such
a shortening of the working day as
would curtail materially production. In
the light of what has happened to make
labor disconnected the security market
has displayed surprising strength. That
confidence was especially noteworthy
last week. when the stock market resist
ed all attempts by bear traders to force
sufficient reaction to dislodge securi-
ties of weak holders.
Market Position strengthened.
In the course of orderly liquidation
that has taken place since the present
decline set in securities have passed into
relatively strong hands. In that respect
the position of the market has been i'm
proved so vastly that 1t is in much bet
ter shape than II was two months ago
to encounter period of acute tension.
Except for violent bidding up and sub
sequent reaction in few highly specu-
lative stocks, the market has been re-
lieved of high pressure speculation,
which gave rise to many misgivings
during the interval when the Federal
not to extend their loans to borrowers
on speculative collateral. The stock
market, therefore, is in good shape to
meet a test that would be provided by
a troublesome struggle with steel work.
ers should such a contest develop.
Should present differences between steel
workers and their employers be ad-
justed the market would be in a posi-
ton sharply to rally.
This Is no time to become pessimstic
concerning the outlook. because many
dangers have been eliminated and the
investment situation has been strength
ened in important particulars. On the
reactions there has been quiet buying of
"a 49,.
large their income account in days of
mounting living costs and oppressive
taxation. Many really high grade bonds
ure avilable at a price basis which
shows the holder an income return OF
between 8 and per cent. In some In
stances an even higher investment yield
nay be had with comparative safety in
Eases in which the holder is willing to
lake long term bond having a some
what restricted market.
Turning to Preferred Stocks.
The public is turning to the per
cent preference shares OF we'll managed
industrial corporations. Those securi-
ties are enjoying a broader market
than ever they had. being absorbed by
adroit investors. 1t Is significant tina:
security departments of financial institu-
lions which formerly dealt only in high
grade bonds are putting their clients
into preferred stocks of first class indus
trial companies on the theory that such
securities probably are to benefit more
than any other class during industrial
expansion.
The public absorption Of bank shares
is similar movement of much signifi.
canoe. The great banks and trust com
panies of this city have profted enor
mously from financing war business
Syndicate operations of the war periot
| we're scarcely less profitable than hav,
been the mass of reconstruction loan
since the armistice was signed. Some o
those undertakings have been pu
through at terms which show an unusu
| ally generous return for the great Wal
Street banks and for the security hold
| ing companies which those institutions
| opeIate. The volume Of that business hal
| been greater than, the public realize, anC
as the movement is only just now vel
| under way the outlook for continued &C
! tivity for months to come is favorable
Besides, there are profits accruing from
record loans to foreign borrowers. which
| have been an important factor since tn,
war begun. Virtually all of tina
! financing has been done by banks of THU
city and as loans were of emergency
order, they were exceptionally profitabl,
| to lenders
IT is not surprising that banks anC
| trust companies of this city In theii
statements covering conditions at the
close of business on September ~ SHOULD
make an astonishing showing compared
with similar exhibits for that date II
| 1918 and 1917. The indications ar,
that this year will be one of RECORD
profits for banks. Some bank direc
! torates, would take that action forth
with were 1t not for tax laws and tn
!. probability that wealthy stakeholder
! would have to give up more than hal
of their dividend increases to the Gov
eminent Besides the profits from bust
ness at home there are also increase,
earnings on foreign business to conside
as New York banks are reaching on
for valuable connections In foreign coun
tries with which they never had i'm
| portant relations. Much of that bust
ness is likely to be highly profitable, a
the opportunity is exceptional for ex
tending American banking connection
abroad.
Foreign Exchange Speculation.
Owing to violent declines in the pric
OF New York exchange in Paris, Berlin
and other foreign markets, there ha
been increased speculation during tn
last few days by traders who hope I,
clear a handsome profit on their pur
chases. That movement has served =
advance temporarily the prices of mark
and francs but speculative buying o
| that sore will not be a permanent In
fluence. Sir Auckland Geddes, presiden
of the Board of Trade in London, 4
L right In AaYinR that IhA further rnnXa