Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-07-05
NEW FINANCE ERA
BROUGHT BY PEACE
Short Week, However, Prevents
Adequate Judgment Of
New Tendencies
BEARS ARE A G G RESSIVE

The current week ushered in a new
epoch for the world and for Wall street,
but the week itself was too much cur.
tailed by the triple holidays occasioned
by Independence Day and the closure
today to permit anything like full play
of movement or of reflection stock mar
ketwise. The financial community was
left much in the dark as to the probable
future course of stock prices. On Mon
day and Tuesday there was doubt
and hesitation caused by the transition
| period of the closing of the fiscal year
when the biggest interests were pre-
occupied in taking care of the financial
obligations which are always large at
the beginning of January and of July
in every year. Thereafter only two
days of trading remained and If they
may be taken as a dependable guide,
1t would seem that there is n consider
able reserve power of buying within and
without market circles.
1t is, of course. impossible to arrive
at any accurate estimate of the propor-
tion of outside initiative to professional
trading impulses. The bear and bull
elements are at the noment pretty
evenly balanced. and when such is the
case the bears are likely to be the
more aggressive. That they piled their
efforts to put prices down in vain at
the beginning of the week was self
evident. A substantial short interest
had already been built up in the period
of rising money rates. Naturally, there
fore, when the bears realized that it
was no easy job to get prices down
they were rendered doubly sensitive to
anything in the constructive line and
were in consequence ready to hasten
to cover on the slightest incentive. But
this sort of thing was dcmonstrative of
little more than underlying strength :;
in other words, it formed a cushion of
potential buoyancy.
Such technical position is not to
the liking of the bears, and it tends to
keep their nerves ON edge as it were.
The quality of business transacted on
Wednesday and Thursday showed that
ther" was much more to the market than
short covering. Western buying was
| an important factor. Speculative en-
thusasm has been dampcned. but not
eliminated, and while il is not to be
supposed that it can be revived with
anything like the fervor which was dis
played between the first week in April
and the first week in June, it is still
something to be reckoned with. 1t is
presumed that next week will prove to
be a better barometer of actual con-
ditions in the market. Midyear tinanc-
ing has been taken care of without un
due stress, and the easier trend in money
so noticeable this week may be OK.
pected to continue temporarily. Call
loans went as low as per cent on
Wednesday and ruled at 6 per cent on
| Thursday. Six per cent is a relatively
low price for money under present cir
cumStances, but actually it indicates
plainly enough lack of ample supply of
funds.
Bankers no sooner dispose of one
financing problem than they are called
upon to face another. Where the rank
and file of Wall street settle back com
! fortably when money rates decline to
the point of relative ease, bankers can
only look ahead to other problems which
loom large and must be faced as. for
example, crop requirements, interna-
tional credits. the building up of ex-
listing domestic industrial enterprises
and the organization of new. The Jour
nal of Commerce estimates new charters
last month at 81 ,256, 900. 900, total
which establishes a record since 1901.
| There were several large consultations.
The list includes T0S companies of more
than 100000 capital Total charter
ings in May were only $74S .6S3 900.
This indicates a remarkable squirt in the
business efforts of the nation, which is
given still more striking aspect when
it is considered that the total of charter
ings since January exceeded So. 700.
600. 900. or 153 per cent more than Il
year ago.
If SO 900 ,000, 900 should be required.
as the estimate has it. for financing n-
ternational obligations and opportu-
mites in addition to the multitude of
items of one kind or another, which
will require large sums of money. such,
for example. the tax payments in Oc-
tober, railroad equipment and railroad
financing which will follow the return
of the roads to private ownership. it is
obvious that easy money is not really
to be expected, that is, easy money in
the stock market sense. The plain and
broad fact is that speculation in secu-
rites cannot and will not be permitted
to play the role of competitor of the
government and of private industrial
enterprise for money supplies. What
so many individuals fail to see and
comprehend is that the economic situa-
tion and foreign trade opportunities and
possibilities far transcends in impor-
tance everything else whatsoever.
Signs of growing expansion in the
steel industry and an altogether re-
markable broadening out of general
business are daily becoming more con
spicuous. The report that American
contractors had secured the work for the
reconstruction of the city of Nancy in
France was an item of the greatest in
terest which was followed closely by
cabled advices from Paris that vast
reconstruction program involving an ex-
penditure Of 10000, 900 900 francs or
the American equivalent of some S.
OOO, ,OOO, 900 had been placed before the
Chamber of Deputies, including re-
building of railroads, now electrified
ton, highway repairs, construction of
public buildings and dwellings and so
on. That this country must play a