The New York herald., 1920-01-25
BROKERS OPTIMISTIC
IN WEEKLY LETTERS.
Majority of Writers Predict Ad-
vancing Movement in
Stock Market.
EXPECT RAILS WILL RISE
Rush of Equipment Orders to Fol
low Return of the Com
panieS.

! In their weekly letters to their custom
ers brokers yesterday made the follow
ing remarks
W. l.. HENSLEY. writing for the firm
OF E. w. Wagner & Co., says:--"Wall
street is disconsolate. The stock market
has gone dead. The bears can't make any
headway on the down side and the bulls
are so blue they can't see bargain when
it stares them in the face. The street was
pretty much in the same humor year
ago. A stupendouS tax bill before Con-
gress. strikes, dividend cuts and copper
metal sales at 16lsc. wero the predominant
ing factors att hat time. We survived the
ordeal and staged a comprehensive spring
rise in security prices, followed by a record
breaking bull market in the autumn. Why
should not the same programme be re-
peated this year? 1t likely will be. Sum-
ming up, one cannot refrain from an op-
timistic viewpoint on most of the ques-
tons before us. Undoubtedly Europe will
tax our shipping and credit facilities to
tho limit in order to supply her require
ments OF foodstuffs and raw materials.
This business should sustain our outgoing
overseas business throughout the greater
part of the year. highly favorable de-
velopment in the business and financial
situation will be the enactment OF new
that it seems an absorute certainty that
Congress will in the very near future take
up this important question. IL is pointed
out that the present law has in one respect
defeated its own purpose in that the up
per scale OF surtaxes has driven capital
into tax exempt securities, OF which $14,-
900 100000 are now outstanding, and more
are being issued from time to time. A.
more eQuable tax law will prove a boon
n n f,I1 CT inn, &c.
the stock market"
BRUMLEY, CHAMBERLIN & co.
say:-''The steel business continues to be
satisfactory and although the earnings OF
the steel companies for the quarter may
be disappointing, due to the strike, the out
look for the future is promising. The cop
pers are in better shape than at almost
any time since the armistice and with the
slow and steadily increasing advance in
the price of the metal and with liquida-
ton OF both stocks and metal the steels
and coppers should be attractiy on all
receSsions."
HENRY CLEWS & co. say:-"while
business on the Stock Exchange has been
at an abnormally low ebb for several days
past and while prices have been corre-
spondingly depressed many shrewd in
vestors are recognizing the unusual bar
gains that are now held out to them in
various directions. Liberty bonds. which
have been under some pressure for several
days, have reached point at which their
yield is extraordinarily attractive, and
the same is true of many of the very best
classes of foreign securities. It would be
hard to see how the best railroad bonds
could fail to be worth less than they are
now bringing in almost any contingency
| affecting the transportation system. We
must have railroads-and they must get
capital upon some basis. In some other
departments of the market also the op-
portunities for the wise and profitable ap-
plication OF funds are exceptional OPP
timism exhibited now in a practical way
will probably be largely rewarded when
the present temporary difficulties are
overcome"
j. s. BACHE e. co. sayss-"The i'm
portant step toward deflation involved in
raising the Federal Reserve discount rate
on commecial paper to per cent should
hav, IN effect in materially reducing mer-
chandise speculation and bringing COM
modities to market in sufficient volume to
affect prices. The increased discount rate
has not affected the market, because Wall
street loans have been materially liqui-
dated. The increased rate is evidently
aimed at commercial and real estate spec
lulation. Should reductions be accom-
plished in. such lines without great dis
turbance to business, security prices
would not be affected. The condition Of
extreme credit expansion must. however,
l be done away with before activity can
develop In the stock market. Uncertainty
AS to the outcome of railroad legislation
Twin also have deterring effect upon
Wall street interests, and, as we'll. event.
lually Gf positively beneficial arrange
ments are not made) upon the whole in
ldustrial structure, which depends upon
transportation. The market has no specu-
llative trend, but for substantial invest
ment we still recommend the preferred
stocks of seasoned industrials.'
C.I. HUDSON 4 co. says.-t'A market
cannot go one way all the time, no mat
ter how good or bad the news may be. At
least IL never has. The manner with
which IL withstood the maximum raise Of
the discount rate TO per cent is strik-
ing proof that this news, which every
body had proclaimed would be very fas-
orable, had so little effect. The market
is, therefore. in position where 1t would
be very sensitive to good news. There
fore, although we still adhere TO the
opinion that while weakened International
exchange markets continue I'd testify to
n critical financial condition abroad and
IL would be well to be conservative in pur-
chasing, we thing II might be advisable.
IN view OF the test the market has had In
this recent development and the way II
stood up against IL, to take profits or re-
duce commitments, IL overeXtended only
on rallies, such as it now looks we may
have most any moment"