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Show MARKET CONDiTTONiS BETTER FOR SPECULATIVE" REACTION Value of American Securities Greater Than Prices One Year Ago, but Some Advances Are Unjustified. By W. S. COUSINS, Editor The American Banker.. NEW YORK, June S. It was inevitable inevita-ble that tho speculative position which had been built up as a result re-sult of steady advances in industrial indus-trial shares 'since tho first of January should at last have its reaction, and tills came on Tuesday in one of the wildest and most violent sessions that have been seen in the New York stock market in many a day. The motor stocks, steel, oil and leather issues, a number of railroad shares and miscellaneous specialties spe-cialties wilted under an outpouring of offerings, which expanded as a "vast volume vol-ume of stop-loss orders was uncovered, and paper profits, built up during weeks and months of activity, suddenly vanished. van-ished. While the technical explanation for the violent break In slocks is simply the un-steadv un-steadv situation that has been buiit up as a result of the advance in the hipnly speculative issues, two or three other important im-portant factors have contributed to this result. Anions them may be noted the warning asainst excessive speculation contained in the federal reserve board's June bulletin and the advance in rail rates, prosumablv engineered by the New York bankers as'a further curb on speculation. specu-lation. . , The shrinkage in prices occurred In those issues where the trading has in recent re-cent weeks been ouilo overdone and where purchases have been made on narrow nar-row margins under conditions which would not permit speculators to pay the higher rates called for in the market. They have also to contend with a new schedule of increased broker's commissions, commis-sions, reducing the probability of proms on fractional advances. There has been no reversal of form in the speculative situation, but the market will be quite better off for the introduction of a little of sober, second judgment. Speculation Rife. There Is no doubt but that the value I of American securities is far above the market prices of one year ago, but it is questionable whether many of them are entitled to the advances they have scored since the turn of tho year. There is in almost everv section of the country an orgv of speculation which reaches from the hichest grade Investment securities se-curities to the penny oil stocks, with the literature of which the mails are Hooded and business men are deluged, and in the flotation of which many are becoming rich, while thousands of poor people are losing their slender accumulations. If the experience of former times and former wars counts for anything, this country is quite liable to witness a further fur-ther expansion of speculation. Immedi-atelv Immedi-atelv following the civil war there were several years 01 continuous e.o,nsion, during which remarkable economic changes occuiTed. These were, in large measure, due to the readjustments resulting re-sulting from the war and the necessity of reconstructing the industrial and economic eco-nomic system of the country. One of the important features of these years was seen in tiie extensive transportation changes and extensions, but it was also true that the industrial equipment of the country was revolutionized. Manufacturing Manufactur-ing had been given a new direction and financial changes of a far-reaching importance im-portance took place. It took a longer time after the close of the civil war to -ret started than is likely to be true at the present time, but when the start was made expansion and speculation proceeded proceed-ed at a rapid pace. There Is now abundant ill'l i'ation of an era of development develop-ment of a similar character. The expansion expan-sion period after the civil war lasted a.-out seven ve.-.rs. hut the European war lias greatly exceeded the civil wr in the seoTe of its effects. The expansion period pe-riod may be correspondingly longer. Comparison Made. Kinphasis on Inflated values may easily be seen bv comparison with prewar prices, which r-how' ti.at nil the industrials indus-trials have risen since litin. while the prees show the effect of Ic.h war trade upon the industrial". The foiiowing comparisons com-parisons are significant: Tx.n-Jiin I, H'rh. nich. Iml'iMrii'.s lf.19. lattl. ltu.'S. IMS. Am. r 4.1 .-.! -IT Am. C. V '-I Pl I'S Am. II. ,t; I. p.M... 71 l-ii m OD't Am. T. (' Am. S Ill 133 11S 119 Am. W 4 111 . . A (i. fe V. I 1'1 li'tl:. S:-rl 'r. -M G-'ii t-Tilrnl l-nh'T .... Pil' ail CI rii.-ni'llT Mnt'.r lot C."0 I'.rn Povlurn -I'l c.T 10 21 Cm. II. I'- st.-. l :.J I'C) ,'T.Tnl Kl-Ttc 111 lit) 1ST I"'. 'l.-ii.Tid Np.t'.rs US J-JO -PI r.f.S iTit.r. Hnrv.-UT ....ll'l Ul 11.1 114 Int. y. Marino. pM.. M U'ti ... K'-i Int. Pnp- f.") c.ii . la la M-t'.enri r.'tr'.i IC-- "JiO 7S 1U7 Mi'lvnl Steel .'.I M 0 r. ; a.". .".n I'lttbnrc fenl 4'. '-I -I'j 42 '4 It. I. A SI-.1 71 -1.1 2-1- .-s Sti,..l.k.r 4't t?l 3.1 It'S t..jis iv 11' 1--.1 llfl : I'liitcrl Ciznrs 1"7 la.1 r.'"j C.7 1- s I A I'T 1C1 4 1 i:u 1 ! S. liul.l.T 13 1PI c,;i 7.1 r. k. s-.-i 11" hi i'-i IV'-frn 1'nien S.1 Ml 7.1 to Pnils Atcl.l.'.ii !W l'3 1'"'. 11 t'.i I; o 44 II l'l'iS l'(l r' '. 1! H.1 Ml ll'l'l ll'l 11, AO '- SI I ui .'Ill', HI! 1ic, f.S orrli M'i ... 11W t P., x I'-I.. :.l 30 If 1. H IlilMmi I"! HI 1'" 1.14 Kr I'.'i 1 -"; ., Nr'li'rn. pf.l ! "1 llliii'.iv c-nlriil 1"! 1"2 1" H'1 t y .11 '.1 b'.V SI'j Vew V'.n; ('titrnl. . . 'Vi'i S3 I'M Ml v,.. p,T..n .. 25 33 ir.l x .,r W'.l.ni 103 ll'l 113 123 P.,;nvlv;,n 4.tl-i 44 12 1 , "1 .....,1..,, 71 T I 17l t.n .' yi,.-tr HI HI 1"'' '' pnli.vi.v' 1 21 r.2 2'.i 21 i r,!,,,, Pn. lfle 121", 1.31 l''l 1 ii WW. r.'Titrnl :"'-: ! T ;ere are manv, however, wb.o 1'iptlfv the ,r.'.nt' rlf ' In Si;,'urllv j.rlces by thn t ribal ions liiat tills country Is about to enter upon an era of new financing and business expansion which will far surpass anything in its history. The unique financial position of tile United States at the present time, tho world-wide demand de-mand for her commodities, and tho quickening quick-ening of her instruments of production, can result only In tremendous profits for her industrial enterprises, and this is naturallv reflected in the advance of tho price of securities. Final settlement of tiie peace terms will give the signal for an era of progress and prosperity that will eclipse anything that this country has ever known, and the realization of that fact is the incentive for the present demand for the stocks which will bo most likely to share in this prosperity. Gold Imports Factor. Considerable significance Is attached to the arrival here this week of a shipment of 56.300.000 in gold from Canada, consigned con-signed to J. P. Morgan & Co. This was the first installment on a total of 518,000,-(100. 518,000,-(100. which It is planned to send here at present. IX'o authoritative statement as to tiie purpose of the shipment was obtainable ob-tainable hevond the suggestion that "it was Britain's wav of settling ber debts." In view of the position of sterling exchange, ex-change, the interpretation generally, however, how-ever, was that it represented the begin-: begin-: ning of a movement which would attain large proportions, and that it marked the resumption of settlements by Great Britain Brit-ain ill gold. Except for some millions of gold earmarked for the Federal Reserve bank, shipped here from Canada some time ago, this week's arrival represented the first shipment received in many months. , One of the Interrogation points of the war financing period has been the Russian Rus-sian 6la and" GVj per cent bonds floated in this country by a powerful banking svndicate earlv in the war. but prior to tho date of America's entry Into the struggle. Thus far there has been no regular default on the interest payments for these bonds, sufficient funds having been produced bv the National City bank of New York to pay all coupons when due. In anticipation of the default of the principal, which falls due on June IS, the June 1 Interest coupons have been paid, a protective committee of bankers has been formed and a call Issued to bondholders bond-holders to deposit their securities with the committee. This is in line with tho steps taken bv Great Britain a year ago, when protective committees were created, although the circumstances in F.ngland and in this country are not identical. The British government, In view- of ils official of-ficial alliance with Russia as a bel.iger-ent bel.iger-ent nation, assumed responsibility for tile payment of the bonds and issued its own securities to tiie bondholders. |