The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-07
FINANCIAL NEWS
AND THE SITUATION
Sustained Firmness Of Prices
of Securities Follows July
Dividend Payments.
SOME SHARP ADVANCES
Basic Grounds for Continued
Optimism in Financial and
Trade Circles.
SOME SHARP ADVANCES
ny WILLIAM JUsTUs BoIEs.

ny WILLIAM JUsTUs BOIEs.
with the adjustment of the semi.
annual dividend and corporation pay.
| ments Wall Street last week recovered
| from Its nervousness over the money
market outlook and. although specula.
| tive activity was less pronounced, there
| was n firm undertone to security prices
| This optimism was justified APPARENT,
II the judgment of the Federal Reserve
| Board that the opinion Is generally
| entertained In nearly every section Of
the country that the prospects for q
successful and prosperous year will
very large output OF goods and almost
| unprecedented financial returns to the
| manufacturers. agriculturists and labor.
ers now are positive is correct. THAI
| expression from the Boards July Bul
| letfn Is followed by the warning that
| speculation may have an Injurious in
| duence IL not held in check.
Grounds for Reinsurance.
That belief properly sizes-up- condi.
lions as they appear at the opening Of a
| new fiscal year and gives ground for
expecting an extraordinary trade reviva
when shipping facilities shall have been
restored thoroughly and readjustment tc
peace conditions completed. The news
developments bearing directly on that
phase include the large contracts given
out here for reconstruction in France and
the expanding foreign trade with con.
tlnued purchases on such a scale as 10
almost exhaust available supplies OF GER
tain merchandise. effective bidding by
American mills to furnish rails and
other steel products to foreign con.
sumers and the definitely improved price
OF copper with increased purchases OF
other supplies manufactured In this
country. That there has been a turn
in the steel situation IL indicated by the
increased iron production during June,
the daily output on July / standing at
I.70o tons. against ST. 500 tons a month
earlier-taken to mean that the industry
was on the up grade again and that
with renewed buying by the Navy De-
partment, by leading automobile inter
ests and for railroad account, the OUT
look for that great basic industry was
much brighter than it was a month ago.
The probability Is that the steel in
dustry will give a much better account
OF itself now that the large buyers have
reentered the market with heavy orders
for needed equipment. II that recovery
continues Ii will havo a beneficial effect
on the large number of related indus
tries, whose orders for steel have been
held back until the attitude Of the heay-
lest consumers had been moro clearly de-
fined. II Is evident that foreign orders
are playing an important part In the
trade recovery, as the labor difficulties
In England have so increased the cost
of producing steel that British mills are
IN danger OF losing a valuable tonnage
to American producers. Advices from
various cities indicate that business
transactions are enlargins and that
phnln
itself to increase production IN various
quarters. That testimony was more i'm
pressive than any given at any time
since the signing of the armistice. It ia
significant that production in many lines
is enlarging in response to an increased
domestic inquiry and without reference to
unprecedented orders expected from
abroad as soon as credit facilities and
shipping accommodations are available.
Restoring European Industries.
In that connection the proposal made
before the French Chamber OF Deputies
that the Government should embark on q
reconstruction programme representing
an estimated outlay OF about $4,000, 900
600 and providing for rebuilding high
ways, railroads and canals and develop
ment Of harbors and other public i'm
provements indicated the scope of the
restoration campaign, In France alone.
American capital has Inter sted itself al
ready in that rehabilitation work. but
inasmuch IS the task has only Just been
taken up. 1t is evident that the project
has passed scarcely tho stage Of pre-
liminary negotiations. But as Mr..
Nanderhp has said, this Is the first time
IN history that one nation has been the
reservoir OF :he worlds credit and at the
sauna tin1a the SfnrahnnsA 80
teriaL The United States ia in an ex-
ceptionally strong position with refer
enee to responding to the unprecede nted
demands Of the reconstruction period
An immense volume Of this business will
be released as soon as credit facilities
are provided and the world resumes
peaceful pursuits on the lines laid down
in the Paris treaty.
II is situation without precedent,
and although II holds the promise OF
rich rewards, calls for careful handling
and most skilful financing. II Is these
heavy foreign engagements that the
Federal Reserve Board has in mind
when it seeks to prevent over lending
on speculative collateral. The country
Is travelling a new path and under
taking responsibilities which It never
assumed in the days when American
merchants rarely sought business beyond
the boundaries of the continental United
States The outlook Is highly favor
able, and there is little doubt that the
powerful syndicate forming under the
direction of Mr.. Dawson will provide
whatever credit balances are needed to
enable the foreigners to send over record
orders for American merchandise, raw
materials and foodstuffs.
Coming Financing.
With the half yearly settlements out
OF the way, the Wall Street market
will coon be called on to absorb I'M
mense loans put out by foreign Gov
eTnments and municipalities. Some of
those offerings are likely to be excep-
tionally interesting with an interest rate
sufficiently high to win the support of
those who in previous years have con-
fined their investments TO domestic is
sues. But the great nations OF the world
are bidding eagerly for American capt.
tai. and although bankers will take care
that such applications do not cause a
Glut In the home markets. the demand
is urgent and must be provided for
here. A considerable portion OF the
s300,0O0,000 dividend and interest fund
disbursed thu month will be avsila BILE
for reinvestment as soon as the recipi-
ents become convinced that the war
hazard actually has been eliminated
from the investment situation. Tho time
when record offerings OF foreign securi-
ties will be made in this market In
pursuance of the campaiRn TO intareat