The sun., 1919-04-07

In the presence OF variety OF con-
hicting factors. some making for In |
creased anxiety as to the future OF |
American industry, the stock market |
last week retained its composure to a |
remarkable degree Except for selling |
OF steel on announcement that the Rail- |
road Administration had declined to pur- |
chase equipment at prices laid down by |
the Industrial Board. there was little to
indicate that the upward trend of Sc
curity prices had been interrupted or
that the volume of selling orders had
increased
The market lacked animation, and |
other than noteworthy strength shown
by some industrials. which, in certain
instances, carried prices to new highs
for the year. the movement was not
especially impressive. But the long
lookedfor reaction did not materialize.
although II appears overdue and in the
nature of Wall Street events must come
sooner or later. The market reflected
basic strength suggestive OF well defined
feeling that underlying conditions we're
sound, that the country was headed for
better things, and that Mr.. Kahn's pre-
diction of ultimate prosperity for the
United States amply justified extraordi
nary developments in foreign trade and
revival of home industries.
DiscountinE Peace.
1t Is apparent that some absorption
Of seasoned securities has been based on
belief that formulation of a peace COM
pact has not been discounted fully here
or abroad. There is no telling when
that happy result will be achieved or
just what disappointments will have to
be encountered before the Paris Confer
col CT 10, x.rhi Oh oil he
world is waiting. But the pressure of
all Europe is SO great that the belief is
gaining ground that final action cannot
be long deferred. Since this Is the most
complex problem that one group Of men
has ever tried to solve, 1t is not surpris-
ing that the deliberations should have
been long drawn out But the world Is
so weary OF II all and such a vast num-
Der OF projects have been held up pend
ing negotiation OF a formal compact
that when once It be signed there Is no
telling what will break loose in a specu-
lative way.
1t Is safe to say that no event has
been more eagerly awaited by the ma
! tons OF the world and that none has been
productive OF so great influence as the
signing OF peace compact will have on
business interests of this and other
countries. The United States stands
with great financial resources. most
powerful Industrial mechanism and
banking system well adapted to finance
the immense volume OF foreign trans
| actions covered by trade acceptances.
II this country. at time when ocean
shipping service is crippled. owing TO
continued use OF hundreds of ships for
| Government purposes. Is able to accum-
ulate during January and February a
| favorable trade balance OF SI63.000.0O0
what Is Il likely to do when the high
ways of commerce haze been re-estab-
llshed and ocean blockades have been
| removed? II is true that the decline
In foreign exchange rates has made 1t
more costly for our overseas customers
to trade with this country and that the
| natural impulse OF the European ma
| lions will be- to erect trade barriers
, needed to enlarge production at home.
Be that as II may, the fact remains
that the United States is the only source
of large-order supply for things which
| the rest of the world needs. This ap-
plies not only to grain, meat and other
| foodstuffs, but to machinery, railway
equipment and a variety OF merchan-
disc which will be required in great
quantities by crippled nations.
Extending Foreign Investments.
Under these circumstances, II behooves
J us to take the loans which Europe has
to offer in place OF the goods and serv-
| ices which. ordinarily. would figure In the
| adjustment OF immense claims which the
United States has against other countries
at this time. They are surely not In
position to remit gold which this
country has more OF than any other
nation on earth. but their promises TO
| pay are perfectly good and ought TO be
| accepted without question.
| Mr.. Warburg's suggestion that the
! situation could be met through the or
ganzation of investment trusts similar
/ to those operating abroad, provided We
make them strong enough to maintain
| a staff of experts OF sufficient ability to
conduct rigid Investigations OF the pro-
perties back of the securities put out
is very much in point. This is perfectly
! feasible and coming from such high
| authority in international banking, r1e
| suggestion may be expected TO bear fruit
| soon after the Victory Loan campaign
| be concluded.
This country has more wealth than
! Il ever possessed before and since the
rest Of the world owes it a prodigious
| sum on foreign trade account II ought
to continue its role OF world banker
| and world lender which II maintained
| during the war We have learned
| good deal during four years of war
about necessity OF distributing risks so
as not to carry our eggs in one invest
ment basket The impelling considera-
ton in this instance is different and has
to do with the necessity or extending
credit accommodations to trustworthy
borrowers with whom We are desirous
OF doing business.
| II such loans be made-snd they must
! he made-they ought to be represented
hy immense bond issues starting from