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Show SCANT PUBLIC PARTIGPATiON " ! 18 SHOWN IfUTOCK MARKET Present Evolution Resembles That Experienced by British in Early Days of War; Business Grapples With Big Problems. By W. S. COUSINS, Editor Th American Banker. NFAV YORK, Doc. h". These are the; davs of meager public interest in the stock markets, and the volume of business neceesarily small. Of course, there is always to be found a certain coterie of professional operators v. ho vie with each other In interpreting the effect of groat events upon the security secur-ity markets, and whatever fluctuations oc'iir from day to d:iy may be attributed almost exclusively to this professional operation. op-eration. The recent ruling of the governors govern-ors of the Xiw York stock exchange r (dative to short selling has greatly reduced re-duced tho activities of the bears, but only after they had succeeded in causing much uneasiness among speculators who were holding thin y-margin stock lists, and in taking tho edge off the market In so far as public participation is concerned. ' While the serious shrinkage in market quotations of leading industrial and railroad rail-road securities does not in any way represent rep-resent a decrease in the Intrinsic value nf the properties represented by these securities, se-curities, Investors recognize tho fact that securities are worth only what they will bring in a competitive market, and try to regulate their purchases accordingly. Industrial leaders are. however, trying to reconcile the apparent- discrepancy between be-tween the heavily extended national budget and the loans to our "European allies, all of which will be devoted to the purchase of supplies in this country, and the decline in the price of industrial securities. Taxes Bring Business. While the raising of big budgets is, of course, an enormous task, the spending of the proceeds must of necessity bring satisfaction and consolation to American business. If taes are heavy, so also must be the Income. The evolution through which we are passing is In every way similar to that which was experienced by the British people in the conduct of the war. In fad, it Is now realized that the war Industry, In-dustry, far from Impoverishing the industrial indus-trial and manufacturing sections of Great Britain, has brought unusual prosperity to them. The accumulation of investment funds of these sections has resulted in the growth of a substantial investment security business. New financing is practically prac-tically limited to government requirements and to war necessities, but these receive the very hearty co-operation of the classes and the masses, who are now enjoying conveniences and oven luxuries heretofore unknown to them. Financial experts look for a similar development in this country, and when the time comes they predict a period of great activity in the security markets. Bonds and Money. Secretary Baker's view of conditions on the western front is concurred in by the military leaders of the allied nations, na-tions, and the. opinion is practically unanimous that within the next . few weeks the most Important and probably the decisive battles of the war will be fought. These facta have riot been concealed con-cealed from the general public, nor have i they been kept iignorant of the fact that j nearly every advantage lies with the enemy. en-emy. The Germans are withdrawing their men from the Russian fronts in an effort ef-fort to batter down tho allies lines before the effeotive entrance of America into the fighting lines. This situation, together with the demoralization de-moralization of the Russian fighting machine. ma-chine. Is reflected In the further recession reces-sion of tho bonds of the allied governments. govern-ments. Tn the case of the Russian bonds, the weakness is further aggravated by the announced intention of the Kolshe-viki Kolshe-viki to repudiate all foreign loans. The new Russian S 's at 37, if redeemed at maturity, offer a very excellent avenue for the investment of surplus funds. If repudiated authoritatively they are worthless and dear at any price. The overthrow of the Maximalists and the establishment of sound government In Russia would, of course, restore the bonds to their true position, but at present pres-ent their purchase Is a speculation rather than an Investment. Low Points Touched, Anglo-French 5b. French government bonds, and French municipals have also touched the low points, making new records rec-ords almost dally. The weakness In these bonds is partly attributed to the fact that France has a very large ln vestment In Russia. At current prices these -bonds, some of which are secured by a deposit' of high-grade American securities, and interest on which Is payable pay-able right here In America, net the investor in-vestor from 10 to 15 per cent. "Even New York City issues are driven to extremely extreme-ly low levels, and available at prices 15 polntfl "below the issue prices of a few years ago. As further illustrating the readjustment that Is now proceeding In ; the money and security markets may le I noted the announcement of the federal farm board that borrowing mtes for farmers would henceforth be marked up, the first increase being from 6 per cent to SVi per cent. The explanation given for this action Is the "war-time interference inter-ference with board's financial plans," and It is inevitable that this interference will be found in every department of business busi-ness activity. Funds Are Available. There are still plenty of funds for all legitimate undertakings, and the banks are sufficiently well supplied to take care of all business requirements. Considering Consider-ing world-wide conditions. borrowing rates are not excessive. The 'banking Institutions In-stitutions are not, however, giving much j encouragement to specula ttve borrowers, land are inlined to frown on stock speculations. specu-lations. The government ha.s first call t upon the banking resources of the conn-It conn-It ry, and until Us wants are satisfied en-; en-; terprises which are not ahsolutclv essential essen-tial must be held in check. There Is no reason to be bearish on the t'nhed States, tut much patience and fortitude will be necessary In The coming days. There is a unanimity of cheerful senti-! senti-! meut among industrial leaders, nnd even I tne severe nanoieaps under which they ; ace operating have not bloekrd up the I roads of progress. Confidence in the ; ability of the country to bear the added i burden of t lie wa r is being muni Tested ; by a larger volume of buying by mann-; mann-; facturers and distributors, and " bv the j greater activity in the launching of new euteinrises. I Business men am gradually becoming ; reconciled to the heavy taxation of ex-i ex-i cess profits: and they are now looking upon the end of the. war as a factor I which will he distinctly favorable to : business. In that it will mean a rcstora-; rcstora-; tion of profits and a freedom from regu-; regu-; La t Inn. Meanwhile the country is ac-i ac-i (.opting its h infhips with good grace ! and is settling dow n to a grim determl-l determl-l nation to lcay tio stone unturned to bring tho wa r to a successful conclu-! conclu-! slop. iLabor Problem Large. Almo.-t as prominent as the railroad ! proMem is the problem of iubor. With a shortage of labor that was already acure. a serious situation has been brought about by the removal of thou-(:inds thou-(:inds of men for the army service. In-cluf-tries are- thereforo compelled to hid against ench other for labor, and the j Whoring man is not- plow to take ad-j ad-j va ntr. l:c oi the awk wa: d sit uat Ion thus (routed. Ti:e laboring man. on th,:. other hand, is con from crl wi f h the si ca d ' advance in commodity prices. om of which have j gen' so far bcnnd his r";'.ch that he in i compelled to d'-pri.e hiniif of many ! articles of bout-howi ne- f-n y. In some I linen the h'i:h pi c-" have lcn caused I by the Insistence oi' t-.e yoo.j house wife to lay in a store of foodstuffs in anticipation antici-pation of a curtailment oi supplies later on. In reality 6 ho has defeated her own object. We are rapidly approaching the time when a greater spirit of self-sacrifice will be necessary on tiie part of every citizen o? thia country: when a united front must bo presented to trio enemy of democracy and humanity, and personal ambitions placed in a secondary position. We must win the war at all hazards, and each one must "do his bit." Perhaps the most important document thus far presented to congress, even considering con-sidering the great importance of Secretary Secre-tary McAdoo's report, wa3 the special report re-port of tho interstate commerce commission, commis-sion, strongly urging the unification of the railroads of the country, and suggesting suggest-ing that tliis can be accomplished either by voluntary action on the part of the carriers themselves or by the president as a war measure under the war powers' vested in him by the constitution and those which have been or may be conferred con-ferred by the congress. Supplementary Remedies. Whichever of these methods is to be adopted there are certain supplementa'ry remedies which call for immediate adoption adop-tion if the roads are to he given a chance to bring themselves together and to keep up a respectable standard of efficiency during the war period. Briefly, these are: Supervision by congress of the operation opera-tion of the anti-trust laws, except in respect re-spect of , consolidations or mergers of parallel par-allel or competing lines; suspension of the anti-pooling provisions of section 5 of the commerce act; granting of financial aid to the roads through loans or otherwise by tho United States treasury; federal regulation reg-ulation of the security issues of the railroads; rail-roads; an elastic provision for establishment establish-ment of new routes and loading schedules. sched-ules. It is very plain that tho commerce commission is very much more interested in its suggestion of unification through private or corporate management subject to government regulation, with government govern-ment financial assistance, than In the commandeering of the roads and running them as a government enterprise. In either case financial aid will be needed, and it Is evident to all that the government govern-ment already has as many "enterprises" on hand as it can comfortably handle. Railroad men for railroad problems would appear to be the most logical solution of present problems, provided suitable recognition rec-ognition is given of the extra burdens imposed by the wa r and the disposition of all concerned to co-operate for the good of the country as a whole. |