New Britain herald., 1926-12-28
STOCKS STILL ON
 AN UPWARD TREND
Market Conditions Virtually the Same for Several Months

SlOcR eXcnanSe history last MATCH,
 and indications of a slowing down
 in some major lines of business in
 1927, the general level of stock
 prices at the close of the year is
 well above that at the end of 1925.
 Bond prices have risen to the high
 est levels since 1913. In both the
 bond and stock markets, the total
 volume of business in 1926 was slightly below that of 1925.
 The major trend of stock prices
 has been upward since the early
 summer of 1924 although the big
 "bull" movement did not get under way until after the Presidential cleo ton that year. At the beginning of
 1926 prices were rising and con- tinued that way, with few minor interruptions, until late in February when a heavy liquidating movement started, eliminating in the disas- trous March break which reduced quota values of listed securities sev- eral billion dollars in the aggregate.
 Alternate periods of weakness and
 
 Spring markets, with a rather defi- uite upward tendency apparent again by early summer. This con- tinued until the early Fall when an- other sharp reaction took place. In the closing months of the year prices started to climb again, the industrial average touching the highest level ever recorded in the last month Of the year
 While 1t is generally conceded that the trend of business and money rates undoubtedly will deter mine the movement of security prices in 1927, predictions of bank CTS and other competent observers of market conditions are more qualified than usual at this season of the year. indicating widespread uncertainty These committed to the cycle theory of business and market trends naturally look for a downward readiustment of values while others see nothing in funda- mental conditions that would war rant a general recession. although admitting that irregularities may de- velop in certain lines.
 Three principal sources of uneasi- ness are. l, the huge volume Of bank funds invested in securities; 7, the rapid growth of instalment buy ing, and 3, the low price of com- modities, particularly cotton. h. ability of business and commercial channels to absorb the huge imports of gold within the last few years necessitating the employment Of funds derived from it's sale in the securities markets, is believed to be responsible for the gigantic invest ment of banks in stocks and bonds. While methods of financing install ment purchases undoubtedly nave been improved and strengthened In the last year or two, the extensive use of this method particularly in the purchase of motor cars, radlos and other luXuries, is regarded as source of danger in some quarters, and it is generally conceded that the real test of the system will not come until the country enters period or general depression. The decline Tn comm odity prices is feared largely because of it's adverse effect on pur- chasing power. particularly In the agricultural regions.
 Favorable factors in the situation as the wear draws to a close are: an abundance of credit at relatively low rates; comparatively low lnVen- tories, resulting largely from so- called "hand to mouth" buying and ouick and efficient transportation, increasing industrial efficiency, es- pecially through the more general use of labor and time saving devices: absence of any serious labor disputes and a generally high rate of employ ment and gradual economic re- mobilization abroad.
 On the other side Of the ledger are: a slowing down in steel produc- ton and building construction; the low price of cotton; increasing foreign competition; the relatively low margin of profit in many indus tries. and the large volume of brok- CTS loans.
 Steel shares. as a group, failed to make much progress although unit ed States Steel common sold at the highest price on record in reflection of an unusually prosperous peace time year, despite the lower level of pig iron and steel prices. Despite repeated official deIials of rumors that the corporation was planning to ' distribute part of its huge undivided surplus to stockholders, Wall Street looks for some action along this line next year, barring an sharp recession in gen. cral business. The common stock was definitely placed on a $7 annual basis during the year. Dividends on the common stock of the Republic Iron X Steel company were restored, after a lapse of five years, and similar action is expected to be talk m shortly by the Bethlehem Steel Corporation.
 oll cOlnp3nleS enJCStu uIltSNdl prosperity but this was not generally reflected in the petroleum stocks. Several false rallies in this group during the past few years, coupled with fears that record brI ':ing crude production this year, would Inseitle the price structure and ad- verseIy effect next years earnings, ed to rather heavy liquidation l., fred and disappointed holders on I'll rallies Retirement Of the pre- fcrred stock of the Standard oil company of New Jersey and the ransfer Of the common stock of the Standard oil Company of New York rom the Curb market to the "big ooard' attracted widespread atten- ion.
 Establishment of new high traffic md earnings records by Class rail oads was mirrorcd in the general ldynce in stock prices and in in- 'reased dividends, the raise on the ate of Pennsylvania railroad com nm bair,er q yytryuC,t -.rt,.-