Show RESISTANCE TO TOAD ADVANCE VANCE AD GROWS WS Stocks ugliest t In Gener Gener- Generation Generation But Position Is Precarious Dr CHARLES S 1 U. U SIE E. E Special Correspondent of or Standard Standard- miner copyright ht 1927 by Consolidated d Press Association NEW EW YORK April 16 Carried Carried along by Ly tho the momentum and pres pres- prestige tige Uge of ot nearly two months of ot rising market values stocks this week es es- established established themselves on on a price e plateau above that witnessed by bythe bythe bythe the present Wall street generation There Thero was vas however clear signs l of or a 6 change In speculation on senti r as a ance once to the advance It Is true that t relief was exp exp- from Crom the wholesale declines In the thC th stocks of or newly established t industries and of others that arp going through an nn over production cycle These declines were sere very Cry unsettling In the early April mar mar- ket Furthermore the general av nv- average av- av during the week eek advanced about two points point tarrying carrying it to a J level 90 points above that of or 1920 There was wa however less confidence dence lelice In the th attack of or the leader leaders for Cor the rise rhe a disposition dl to pause pauso for Cor a while and appraise the fac fae- factors tors torR in the general business situa situation tion and a a. aery very ery decided shifting shirting o 0 othe tho the load of oC stocks front from the professional pro rel- rel atonal element clement to the tho public TWO SIDED MARKET It will wilt be necessary ne essary for Cor sony so sone time to separate tho the stock market mark t tInto Into two t 0 parts the time one ono composed of oC shares of ot an Investment hJ charac charac- character ter and of ot companies that have been accumulating large cash re reo sources and still have good business P and the other Identified with shares that have ha more or less lesl gone gene up with the others but have today no outstanding merit The Time first group will continue to b bo affected favorably C by cheal cheah money and the second by whatever turn there may ma be this year ear in tin tim country's business and pOliticaL tides tl ts It Is conceivable that we may throughout have 1927 a strong of ot Investment stocks and a u disorganized group of or t. t stocks If Ie the first conclusion is accurate rate then it must also be true that bonds and preferred stocks wilt wll seek a level le considerably than that of or today toda There has sel sd dom been so 80 little conflict t of oC opinIon Ion over tho the probable course o. o ot of long term mortgage bonds as there Is now LONG LO TERM BONDS hiONIS S IN DEMAND One of or the largest of ot the New NewYork NewYork York national banks In analyzing Its bond list recently discovered that 25 per cent of or It Il embraced I bonds with a maturity of oC less than thai 10 years ears The management of or this bank believed so strongly In high higher er em prices that It sold a a. fair Calr por por- portion portion tion of or the short maturities and am purchased a corresponding amount amoun of oC long ones on s. s Another national bank also a be lIever llever In a return in bond yields tc to toan toan an approximation of oC those of or 25 2 years ears ago has within a jm c recent laie increased its holdings hol ings of or United States Slates govern govern- government ment bonds b to A week eek ago In this review some Bome prices were given of or railroad stocks as they the stood in the big bull bul t of or 1906 That rhal market did not ha hare so much relation to ea easy money money as it did to the winding up of or a year ten ten Y ar period of ot lion and national prosperity follow follow- followIng Ing lag the time depression In the In 1901 and 1902 there was wall a a. a period perlo of ot very cry high bond prices based basell al almost al al- almost most entirely on abundant money mane supplies and as the money condi condl conditions lions then were quite similar to those obtaining today toda to continue for Cor some time It Is inter Inter- interesting Interesting intereSting esting to compare the thc two periods period as a guide post along the route o of Jhc ho Investor S RAILS HAILS LOW LOV For this purpose 15 1 I bonds ha e been selected None o of oC them has been Deen affected In In the 25 23 5 year ear period by reorganizations o or any permanently unfavorable urita con con- conditions conditions of oC earnings These bond bonds bondIn In 1901 and 1902 sold at an aver aver- average average age about 15 points above e thi this weeks In this group were AtchI AtchIson son San general 48 which were selling at with the common stock below 50 and paying a small lend Then there were the more Ohio first at am and Baltimore Ohio common without dividends dl Southern H- H Pacific Pacific-Centra Pacific collateral at 10 and no dividend on Southern Pacific also Union Pacific at 1074 i with Union Pacific common having jUt just begun dividends at 4 per cent com corn compared pared with 10 per cent at present In Ii 1901 United States govern govern- government government ment 45 4 of or 1925 19 5 were slightly un un- un- un det There were circulation privileges to banks holding then which added to their market value alue The main factor was Vas that of or cas easy money mone The United States trees treos ury UI 45 of or 1934 which have about abou the same same period pero to t run as did tin flit United States in 1901 1911 arc are quoted quoted ed cd at CHEAP MONEY INFLUENCE In the tho spring of or 1901 1301 1 01 call monc money moner ruled around 2 per cent and In th Ui summer and early autumn months month m It was as low as lj 1 per cent Six s x months loans averaged about Sit 3 It I Ip r pc-r p r cent as against 4 per cent a at present The bond market re remained rr- rr strong until tho the latter part ot of 1902 when money rates began to harden and md entered ent upon a pe pe- period period pe- pe nod ot or prolonged ed disturbance and Cr quent deficiency in local bank- bank bankIns bankIn banking Ins ing In reserves It Is doubtful if It we shall see time the extremely low V money rates of ot i t quarter of or a a. century ago repeated That they will 1 fall Call well below the present pre nt level le however Is the tho best b r opinion available a In banking and an Investment circles It Is obvious however that the purchasing pow power er of or the time Individual bond buyer buer Is l oh greater today than it was In 1901 and that the time absolute values alue of oC American corporation securities are arc very much In excess of ot that thaI y yar var ar In addition the basis of ot our credit Is a a. stock steele of or gold equal to half hair of or the visible supply of or the world It is therefore not unlikely that wi an shall ill see government and arid muni municipal cipal tax exempt bonds selling seUng be loe a 34 3 n per cent and a a. 34 31 3 per pr cent basis legal and other un un- underlying underlying un- un denying railroad mortgages below belowa a a. four per percent cent basis public utility legal bonds at 4 vcr per per cent or un un- under under Under der and the time entire group of or snore moro foreign government gO and cor- cor portion pOM Issues well up to their call prices and In fact tact considerably limited as all to future appreciation by bythe b bythe the of ot which wi-Jeh shrewd finance ministers In Europe and South America nominated in the bond |