The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-05
RESISTANCE SHOWN
BY STOCK MARKET
Influences Calculated to De-
press Prices Fail to Produce
Effect Sought.
OPTIMISM rs DISPLAYED
Signing Of Peace Treaty Is
Discounted in Large
Measure.
OPTIMISM rs DISPLAYED
by WILLIAM JUsTus BorEs.

BY WILLIAM JUsTUs BoIEs.
The stock market last week displayed
notable resistance to a variety of infiu-
ences calculated to depress prices II
withstood the effect OF large selling or
ders, based on the abandonment of the
extra dividend on Steel common stock,
and paid little attention to advice of
banks to customers to reduce loans hay
Ing highly speculative securities as COL
lateral. The market also gave little
heed to stories of Industrial unrest and
startling disclosures concerning efforts
OF radical fanatics to destroy life and
property.
The seriousness Of some phases of
the labor situation were emphasized by
May day disturbances. Had basic con-
ditions been less sound the market
might easily have reacted violently. As
II was the fractional decline in prices
that took place was Of slight Importance.
considering the spirited advance which
preceded 1t. There was a distince buoy
ancy in the closing days.
1t Is still a million share market, full
Of optimism. strength and visor. with
the impulse definitely on the buying side.
1t has entered a price area where proflt
taking will be more Of a factor, owing
to handsome gains accruing to those
who accumulated stocks around the De-
cember and January levels. Many Of
those buyers last week realized on their
holdings and others may be expected to
sell out as the market advances from
the present basis. 1t Is still bull mar
ket In the sense that there Is nothing
to indicate that the movement has spent
its force or that the powerful interests
have convinced themselves that lower
prices are in order. The outside public
has become an important factor in the
market, paying outright for much that It
has purchased. The incentive for these
transactions has been the prospect of an
early dissolution OF the Peace Confer
ence with the conclusion OF q satisfac-
tory compact to insdfe the future peace
OF the world.
Future OF Speculation.
This brings UP the interesting ques-
tion whether the market has fully dis
counted the signing Of a peace protocol.
There has been a sustained rise in prices
for more than eight weeks, during which
nearly all active shares have advanced
to much their highest levels OF the year
and in some cases to highest figures
which they have touched. This move
| ment has been represented by long
series OF million share days with mar
kets full Of human interest and success
sive upbidding of different groups OF
stock in the effort to arouse the public
to high pitch of speculative enthusi-
asm. The broader speculation for the
rise no doubt has been in anticipation
Of the expected forward movement in
world business.
Through the striking advance in Sc
curity prices that has taken place It u
reasonable to assume that the markets
have discounted in a large measure the
signing OF the peace compact. In the
natural order of things there should be
some reaction on the announcement that
the compact had been signed after the
initial demonstration over such a de-
velopment of worldwide significance
After that the real test will come, be.
cause IL the market holds its initial adj
vance 1t is pretty sure to go higher
The excitement might easily develop a
runaway market in the hands of a pub
lie which up to the time that the present
movement began has evinced commenda-
BILE caution in its speculative commit
ments
Speculation has reached the most In
teresting stage of the armistice period
and the future of the market will de-
pend largely upon the sort OF compact
which the Paris Conference formulatee
| and its reception by the great nations
The United States OF all nations Is
best equipped to give a good account OF
Itself during the days that are ahead be.
cause of its phenomenal crops, hug,
gold reserve and superb Industrial or
ganism. With banking system virtual,
shock-proof and relatively insignif
cant war debt, this country will not b.
burdened as will European nations by
having to solve more complicated prob.
lens of after war finance. Wages arr
high and in some industries going high.
er. But the labor situation Is compar.
auvely simple here compared with
troubled conditions in Europe.
This is the only belligerent country
which ended the war with a flourish ing
foreign trade and an international trade
balance largely IN excess OF that shown
by any other nation since the establish
ment of international finance. The rest
! of the world Is SO heavily indebted to us
as to make it essential to this country
| to grant immense credits to those ma
lions with which we hope to carry on
| lucrative trade.
The Steel Dividend.
The United States Steel Corporation
| directors did last week what Wall Street
expected they would do in declarine
only quarterly dividend at the annual
rate of per cent. on the common stock
The directors were fully justified in their
action in emitting the extra dividend
on account of trade conditions and vir.
tual stagnation of an industry the futur.
| OF which Is obscured by uncertaintie,
| OF an open market for steel products
| Business has been at q standstill since
the failure of the sterilization plan and
the refusal OF large consumers and the
Railway Administration to give out i'm.
portant buying orders at the prices ap.
| proved by the Industrial Board. Thi.
action has brought all Industrial man.
ayers face TO face with the necessity Of
| quoting prices at which business would
be offered in volume sufficient to engage
large portion Of their productive IA
| cilities.
The problem of industrial revival 4
| largely the problem interesting the larg,
consumer. for without his orders no gen
ulne recovery can take place. In tn,
last analysis the only price STERILIZATION
! worth while 10 that which Is based Of