Venice and dabbled in the same oldmasterish waters. I give among my illustrations one or two souvenirs of Chase's earlier period. They show how, with that susceptible nature of his, he felt the impact of Duveneck's individuality. He had an extraordinary faculty of assimilation, as he was to show later in his contacts with types as different as Velasquez and Boldini. But the central point about Chase as about Duveneck was the pure painter's ardor to which I have so often alluded. Here in the East, in New York at the Art Students League, or in classes of his own on the Shinnecock Hills and in the Prado, he campaigned through precept and example for the probity of art. He trained a whole generation of our painters in a respect for the traditions of a noble craft. And he, again like Duveneck, was a well-spring of wise enthusiasm. It is good to think of the two men so richly endowed, so profuse in production, giving whole-heartedly to those who came to them for help. The energizing principle underlying their influence, the principle of good, honest painting, runs like a golden thread through much that is most valuable in American art. What they did for their countrymen should be remembered-and it should be remembered also that they worked out their method, not in Paris but in Munich. A calendar of current art exhibitions will be found in the Fifth Avenue Section. Impressions on Entering SENSE OF PERPLEXITY OVER CHANGED FINANCIAL EXPECTATIONS- THE BY ALEXANDER DANA NOYES HE new year has begun with financial ON the whole, however, after all the Expectations for the New Year sentiment in a somewhat curious position. Those prophecies of reaction which were published a year ago and reiterated at intervals up to the later autumn were wholly unfulfilled. New Year's Day prediction for 1927 was made up of almost unanimous expression of satisfaction with the existing situation and confidence in the future. Even the contingent warnings of January, 1926, were mostly absent. The financial public, therefore, entered the new year in an extremely cheerful mood. Yet it was obviously tempered in many minds by recurrent doubt as to whether the visible and very notable American prosperity could continue on its existing scale indefinitely; whether, indeed, it could outlast 1927. Probably, where this feeling was dominant, it arose chiefly from past experience, which had certainly taught that, even in the country's most celebrated epochs of sustained peace-time prosperity, there was no record of more than two or three years of continuing good times without some intervening setback. To this it was commonly answered by the cheerful prophets that the important and salutary change of the last three years in business methods, use of credit and adjustment of production to consumption, had removed the principal cause for the old-time alternation of extreme activity and equally extreme depression. Cheerful ness in the variations of financial sentiment that had marked the old year, with the alternation from enthusiastic hopefulness to something like apprehension and back again to a burst of enthusiasm business community has en- Markets at the year-end, the American tered 1927 in a spirit of great confidence. It is possible, indeed, to say that at no time since the war, with the single exception of 1925, has belief in continuing prosperity been as strong as at the opening of the present year. Even when our present era of prosperity was beginning to shape itself, in 1922 and 1923, both scepticism as to whether anything more years began with a prevalent spirit of than slow and halting recovery, with intermittent relapse, was possible after so severe a shock as the readjustment of 1920 and 1921. The sense of financial reassurance which became plainly visible around New Year's Day of the present year was largely based on the tangible evidence of high prosperity with which the old year had ended. Reports of large company earnings, increased corporation dividends, and statistics which unmistakably reflected great activity in trade and industry, pretty well agreed in their testimony. Probably, however, the mind and imagination of the financial public were much more potently influenced by the categorical summaries of the basis for our existing national prosperity, given out from high official sources. In their surveys of the situation a year ago, no one had been more cautious about the future than the two men of large affairs in the present ministry at Washington, Mr. Hoover and Mr. Mellon. The Secretary of the Treasury had personally pointed out certain doubtful considerations which might gravely impair the year's prosperity. BUT UT Mr. Mellon's conclusion on the present situation, in his recent annual report, is that "the country has reached a level of national income not before exceeded," that the year-end "has brought no indication of an ebbing of Judgment this high tide," that the scope of High Authorities of our present prosperity is attributable to "the broadness of its base," and that, "with all this spending, savings accounts have gone up, more life insurance is being written, and sound securities are sought by the small investor." His inference, therefore, is that "we can look forward to another satisfactory year." Mr. Hoover emphasized the facts that the great expansion in trade activities had been accomplished "without dangerous tension of commercial credit, without any perceptible increase in merchandise stocks, with a smaller stock of money than in any other recent year, and without any appreciable advance in the level of wholesale prices." From this he inferred that the year-end situation marked "a steady growth, reflecting the general progress of industry and commerce rather than any temporary inflationary expansion," and that the volume of legitimate consumption is clearly "sufficient to take care of the constantly greater output of our industry." official prophets, the business community was disposed, as the new year opened, to lay great stress on the sound money and credit situation and on the abundance of American capital. THIS phase of the situation was reflect ed very strikingly by certain incidents almost at the year-end. One was the action of the United States Steel Corporation on December 18, in voting distribution to its existing shareholders of part of its accumuThe Steel Company's lated surplus, in the shape of a 40 per cent dividend in new Dividend " stock. It was assumed that future cash dividends would be so adjusted that the recipient of this "stock dividend" would get a larger quarterly payment on his holdings than he obtained before. No one doubted the company's financial ability to make this change, with its present surplus fund of more than $500,000,000. But, as it happened, the company's chairman had declared, only eight months before, that payment of such a stock dividend "cannot be done with safety at the present time," in view of the possible vicissitudes of the corporation's business. The contrary decision of December was therefore generally accepted as proof that the eminent financiers on the company's directorate now saw no cloud on the financial or industrial horizon. An incident in some respects even more impressive was the "Treasury financing.” Because of the large payments falling due for income tax on the 15th of March, June, September, and December, and because interest on the public debt is mostly payable at those dates, it was arranged in all the Treasury's post-war operations that the same dates should be fixed for the maturity of government borrowings of a one-year term or less and for the offering of new short-term loans to provide for part of the necessary redemption fund. On December 15, $450,000,000 of the short-term debt fell due, representing notes bearing 334 per cent interest. The Secretary announced that most of these would be taken up from the Treasury's surplus, but that the balance would be met from the proceeds of some $200,000,ooo nine-months' notes, bearing only 34 per cent interest. This short loan, offered (Financial Situation, continued on page 59) It will be perceived that all of these considerations affect the business of the new year as well as they explain the achievement of the old year. The question remained to be decided, whether the beneficial policies, practices, and facilities outlined in these two reports will continue without change or modification during 1927; that is admittedly a problem for the future. But the fact that they had continued throughout 1926, in the face of insistent and positive prediction to the contrary, naturally predisposed the financial mind to hopeful conclusions. Like the (Financial Situation, continued from page 226) at so low a rate, brought applications in a total amount no less than $1,096,000,000. IT was the largest "oversubscription" in the history of the government's post-war debt, with the single exception of the $1,460,000,000 tenders for a $200,000,000 loan offered in December, 1924. But that loan was to run for thirty years; it carried an interest Evidences of Easy Money rate of 4 per cent, and the subscriptions were made when six-months' loans were bringing only 3% per cent in the open Wall Street market, as against a 45% per cent rate on the 15th of last December. The inference, therefore, plainly was that the banking community expected easy money to continue during at least the nine-months' life of the Treasury's December loan. Another indication of the strong financial position has been the market for investment bonds. Measured by a carefully compiled daily average for representative issues, domestic bonds had fallen in price from 893% in the early months of 1914 to 8234 on the outbreak of the European war. They had recovered to nearly 891⁄2 by January, 1917, but fell to 651⁄2 in the "deflation period" of 1920. Notwithstanding subsequent financial recovery, the huge weight of the war indebtedness and the immensely large issues of new securities, the average price had not until last December matched the average of January, 1917. Before the month was over, it stood at a higher level than on any day since the early part of 1913. IN particular, the growing interest of American investors in foreign loans has been illustrated in many ways. New issues of the kind, taken by Amer People's Loans to Europe ican investors during 1926, ran far beyond a billion (Financial Situation, continued on page 61) The Solid Basis for Every Investment Plan A well-known Financial Editor said recently: A deposit account in The Williamsburgh Savings Investors everywhere may have the advantages of this Savings Bank. Write The Williamsburgh Savings Bank Flatbush and Atlantic Avenues BROOKLYN, N. Y. 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