The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1917-05-13
MARKET BRICHTENS
AFTER WAR BREAK
Investors Certain Of Nations
Underlying Strength
CREDIT due TO CONGRESS
Financial Legislation Largely Due
for Return Of Confidence.


Ever since this country entered the
war early last month banking and
securities circles, as well as the rank
and file Of the Investment public, have
had before them pending measures Of
the most far-reaching Importance,
and the same interests have been call
ed upon to rsadjust their views OF
war conditions In Europe. The sub
marine menace has been Increasing,
Russia has been hanging over the al
lied cause like q dark cloud on the
point OF precipitating q disastrous
storm, the crop outlook has been any
thing but cheering, and Mexican af-
fairs have left much to be desired in
that quarter. Throughout this trying
period, the securities markets moved
almost serenely save for occasional
disturbances. With the advent OF this
week, however. It became evident that
the strain on the nerves OF the entire
country had about reached the climax
OF endurance.
Break Not Violent.
The break did come this week, but
to the surprise OF most people, per-
haps, It was not particularly violent
because with all the uncertainties to
contend with, there was ever the
consciousness that underlying what
ever might come was strength inner
ent In the fact OF our economic sound
ness. The biggest loan the United
States has even been called upon to
float and the most extensive taxation
program this or the preceding gener-
affnr rnfnld rnnTafUa ~ a. he
caused hesitation and widespread
feeling OF doubt In themselves these
projects were not SO terrifying, but
they were potentially fearful until
definitely disposed of.
That the nervous strain was telling
as the time for their contamination
approached was reflected in the wave
OF investment selling which set in In
the middle OF the week. Institutional
liquidation, selling by individual
holders OF taxable bonds and invest
ment stocks, Wholesale abandonment
of the railroad issues, and so on,
brought about intervals OF extreme
weakness in prices. the moving i'm
pulse probably being a desire to ac-
cumulate funds with which to meet
the fiscal burdens of the war.
Like n Man Facing Debt.
The whole situation Is analogous to
the position OF a person who knows
that at some indefinite period in the
near future he will be required to
meet new expenditures. and he goes
about II by turning whatever he may
into cash, while regretting to do SO.
Then he finds that the requirements
are not so heavy as he, in his nervous
worry, anticipated, and so he breathes
easier again and proceeds to put his
leftover funds back into investments.
With the fiotation OF the 81, OOO, 0OO.-
900 war loan, the publication OF the
details as to denomination, method OF
payment, and maturity date. the in
PRODUCTION OF the revenue bill in the
House of Representatives.. and agree
ment on the terms OF the consumption
bill, sentiment forthwith displayed
marked Improvement. The crafty
ing inflow Of war bond subscriptions
promises success for the first offer
ing, although II is to be borne IN
mind that subscriptions to date have
come from banks, banking houses,
and wealthy investors mainly.
Real Test Yet to Come.
The real test OF the Liberty Loan as
a popular measure will come between
now and June 10, when the subscrip-
ton books close, because II is within
that period that the small investor
and salaried man will show to what
extent he Is prepared to contribute.
As to the taxation program, II may
be said that the revenue bill meets
the approval OF the banking frater-
nifty, although the provision for the
nf IN TIgfnma dntV
on articles now embraced in the eX-
listing free list was regarded as a
rather free and easy way of solving
the problem OF raising the necessary
total to some 81 ,S00,OO0,000.
AS has been pointed out, II II IL
economically sound TO admit raw ma
terials free in peace time II Is equally
so in war time. The excess profits
tax increase and the retroactive fea-
ture OF the bill also have their severe
critics. However. the bill must yet
run the gauntlet OF Senate criticism
and pruning. II never has been and
probably never will be possible to
frame a war tax program without
hitting some in a particularly sore
spot.
With the turn of the middle Of the
week, further developments improved
general feeling. Assurances from the
provisional government OF Russia
with respect TO her adherence to the
cause of the entente were received.
following the successful issue of the
uprising in Petrograd which threat
ened the stability OF the new regime.
The danger is not indeed entirely re-
moved, as unforeseen events are al.
ways possible in a country scarcely
as yet out OF the throes OF revolu-
tion.
On our Southern border, some COM
fort was derived from the declara-
ton OF neutrality on the part OF
Mexico.
wheat Causes Apprehension.
Apprehension was caused by the
Government report on the winter
wheat crop which is expected TO fall
short of last years crop by some
116,O0O.0 900 bushels, although there
was a marked increase in the condiS
ton OF the crop over April l. The
outlook seems to indicate that the
| country will have little more than
| enough wheat to meet its own con-
sumption needs, unless there is a pro-
nounced curtailment OF our appetities,
or we are willing to substitute corn
for example, which promises a bumper
| crop. The showing caused the most
| violent fluctuations in the Chicago,
Winnipeg. and Minneapolis markets.
with May. July, and September
! options selling at the highest prices
| on record.
ut -r-..- f..,ura If thu sfk