The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1909-06-23
HIGH PRICES HAVE AMPLY DIS.
COUNTED ALL KNOWN PRE-
vIoUs CONDITIONS.
Considerable DistributionVof Securities,
Which Are Passing Into
Weaker Hands.

has shown symptoms of to-heaviness,
and much of the support shown in pre-
vious weeks was apparently withdrawn.
1t is universally conceded that prices
have leen very high, and have amply
discounted all known favorable condi-
TONS On the one hand it was admitted
that with an abundant supply of cheap
money and stocks largely concentrated
into a few hands it was possible to hold
the market at high level, and even
force special stocks to still higher fig
ures. On the other hand however, it
was recognized that conditions are
gradually changing. There has already
been a considerable distribution of Sc
curities which are slowly passing from
strong into weaker hands. There has
also been an abnormal expansion in
loans largely for stock market pur-
poses; the bank reserves have become
much depleted and Europe rather dis
amounts of American finance bills.
Moreover, many. of the most conserva-
tive local bankers are opposed to any
further encouragement of speculation,
and some of the largest international
bankers are known to believe that the
market is too high, rejecting in this
resDect the well known opinions of their
foreign connections. Nor is this all
Indications are multiplying that, al
though money is still very abundant
the period of abnormally cheap money
is drawing to a close. Business re-
quirements are increasing, and when
the crop demands assert themselves
better rates for money may be antlci-
pated. There is, of course, no stringency
in sight, for lenders have found much
difficulty lately in satisfactorily en-
ploying their funds, but when interest
rates advance many securities may not
lt,ol; as cheap as they now do. There
is no doubt that the investment demand
for stocks 10 being restrained by pres
ent high prices. Good bonds are in
satisfactory request, and with the ap-
rroach of the July disbursements it is
probable that the demands from in
vnstt RS may be sufficient to prevent any
unusual reaction. 1t is known also that
the leading bankers still have various
;n,lr,rtant financial projects on hand,
which may comrel them to give the
market support in case of necessity.
General business continues fairly
satisfactory Activity is somewhat
sn3ttv. some lines of business being re-
latively quiet, and the fact that sum-
mer inertia is gradually approaching
tends to moderate optimistic opinions
in trade circles. although the volume OF
business is on a considerably better
scale than a year ago. The tariff sit
nation now attracts little attention,
since it is felt that no seriously dis
turbing legislation can be expected IN
this quarter.
The efforts of the national govern
ment to increase its revenue, While not
an important market factor, excltes
more or less interest in financial cir
cles President Tafts proposal to tax
net profits does not, of course meet
with general approval. Such an in
ouisitorial tax would compel corpora
tions to open their books to govern
ment officials in a manner that would
often meet with serious objection. In
ouisitorial methods would be necessary
to prevent deception, thus presenting
MANY of the objections which belong
to the income tax. The deficit for the
current fiscal year may approximate
| about. 500, OoO,O This is less than
was expected, and with a revival of
business the losses in revenue are likely
| to diminish. The true policy for the
government would be to curtan ex-
i nanS6S. ana not W lui tiCl ouoAAiShN
the burden of taxation under which the
country is already complaining. If fur
Their revenue must be obtained, it could
be more easily, more efficiently and
more 6duitably accomplished by adop-
ton Of the stamp duties. These could
| be imposed upon business documents
in a manner to raise quite sufficient
revenue at least expense and without
fear of evasion Such tax would not
touch the poorer classes and would
only be felt by the well-to-do.
The report of Governor Hughes
Stock Exchange Committee is, upon the
whole. a very commendable piece OF
work. Though not agreeing with every
Recommendation, many heartily endorse
all proposals which tend to raise the
standard of the dealings in securities