The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-09-29
FINANCIAL NEWS
AND THE SITUATION
Favorable Turn of Labor Con-
ditions Strengthens Invest
ment Sentiment.
HEAVY EXCHANGE BUYING
Securities Advance and Stock
Market in Shape for Good
Rally.
By WILLIAM JusTUs BoIEs.

BY WILLIAM JUsTUs BOIEs.
The stock market is in q position to
rarent failure Of what was supposed to
be a terrific struggle for union labor
supremacy in the steel trade. Organized
labor has not made good and, with the
astonishing disclosures about the radical
tendencies Of one OF the leaders directing
the strike. It u not probable that the
movement will gain much Roadway with
out governmental interference. There
Is much in the situation to Justify the
investing public In taking hopeful view
OF the labor outlook. This strike was to
demonstrate the strength Of the labor
movement as no other strike for gen.
Grafton had demonstrated it. The peo-
pie were prepared for an extraordinary
contest which does not appear to
threaten.
Meaning of Plttsburg Episode.
The strike so far is a dismal failure
in the sense that the greatest Of all pro-
ducers has not been crippled at all.
Judge Gary has had the best OF the
argument ana, although there have been
heavy defectionh enough men have re-
NAMED on duty TO keep large produc-
two capacity going strong. The strike
IL young and It would be taking too
much for granted to suppose that the
feeble effort that the unions have made
represents the most that they can do
The situation at any rate 10 much less
alarming than II was. and In their bear
ing on the country's industry In general
the developments Of last week are re-
assuring to those who have looked on
the labor unrest as the most serious bar
rier to sustained recovery from war
conditions.
The strike peril has not been elimi-
mated and social unrest has not been
cured. But in the first test of strength
| at the worlds greatest steel centre labor
| has demonstrated that 1t Is by no means
unit in advocating extreme measures
in a crisis of this kind. 1t Is serious
thing for the average worker in these
days Of high living costs to give up mis-
pay envelope and see huge plants closed
down. After the first day or two of ex-
citement-the strike to succeed must
make good then-the daily routine OF
idle waiting always becomes irritating.
But in these days Of record wages and
luxury habits the cessation OF the pay
envelope puts the average worker to a
terrific strain. This Is one lesson of last
weeks Pittsburg happenings which will
have peculiar interest to all students OF
economic conditions in postwar readtust-
ment. The empty dinner pail is more
distasteful than ever to the man who
has given up $40 or more week at the
behest OF labor agitator.
Firmness of security Prices.
These considerations were effective in
1N1W bat
strength which otherwise 1t would not
have displayed The inquiry was chiefly
professional, but public buying Of invest
ment securities on the exchange and at
private sale has been enough of a factor
to cause several banking houses to an
nounce new offerings OF bonds notes and
preferred stocks. Those transactions ag-
gregate a sufficient total to show that In
the judgment OF the shrewdest invest
ment experts the market was ready TO
absorb a large output OF them. The indica-
tons are that many other public offerings
of the kind will be announced In the near
future as a result of the negotiations in
progress between New York bankers and
borrowers here and abroad The market
Is entering the most active investment
season of the year and Notwithstanding
| labor disturbances the prospects are that
| the absorption of good securities will be
materially extended during the next
| three months. Numerous foreign Gov
ernments and municipalities have applied
to local bankers for large advances to
finance huge reconstruction OUTLAWS which
crippled nations OF the war area have to
provide for as soon as necessary credits
can be procured.
| The upward movement in foreign ex-
change rates reflects an increasing In
vegtment in the bills of London. Paris
and Berlin banks Of financial interests
| and private Investors of this market
| who are familiar with the modus op-
erandi of such transactions. Through
such operations the New York buyer 1,
, able to obtain from a strong local bank
i a draft on one or more foreign finan-
| cial institutions of immense resources
Inasmuch as the foreign banks allow g
| generous interest rate on deposits, the
| New York purchaser Is sure of lib
| eral income return on the sum invested
and in addition stands to gain hand.
somely through the appreciation OF ex.
change rates. In the natural order OF
things he expects to DO able to sell his
draft at a handsome advance from the
price paid for 1t and In the meantime
obtain a liberal rate of interest on hi
investment. Inasmuch as the price al
which the draft was purchased was vir
tually the lowest level ever touched by
New York exchange on European mar
kets, there is good reason to believe thai
the American buyer will make a gooC
profit on his operation. Such transac
lions are too technical, however, for the
ordinary investor to engage In, beinl
governed largely by fluctuations OF New
York rates for European exchanges
ThSre is no great mystery about foreign
exchange II its basic principles are un
derstood.
October Dividends.
During the next fortnight upward o.
$125, 100000 will be disbursed In quar-
terly dividends and interest A fail
proportion of that sum will be reinvest
ed in new building operations, as al
unusually large number of investors ar,
engaged in the pleasant task of provld
ing abodes for their families. TIT
American people, to much larger ex
tent than is generally realized, hav,
been for years dependent on landlords
and without shelter OF their own-i
curious situation which has come abou
naturally from adequate housing facili
In pttt "a.