The Washington times., 1917-04-15
THE WASHINGTON TINES SUNDAY. APRIL 15 1917
UNCERTAINTY FELT
IN MARKET CIRCLES
Several Factors Brought More
Optimistic Feeling Late in
Week, However.

| N6" 1ONhp April lO.-brOdoly
speaking, movements in the stock
market in recent weeks may be said
to have been the result either, of short
selling or short covering; that is to
say, when the market went down IT
was mainly because OF the putting out
of new lines of short stocks, and when
It went up It was due to the fear by
the shorts of a general advance. or
the receipt. of news that would seem
to indicate an advance, and the conse-
quent rush to buy to meet loan obliga-
tions. Such trading as this Is usually
the work of professional traders. This
week was no exception. Outsiders
have held strictly aloof save for now
and then a little commission house
buying and selling. in amounts in
significant in the extreme. In the
first half of the week prices. were
heavy, and in the second half they
were inclined to be firm Neither
movement meant anything except as
emphasis OF the fact that the public
was strictly on the outside. The vol
ume Of trading was moderate at all
times.
The reason for this situation IL not
far 30 seek. Since the close of last
week the impending Government bond
offering has been hanging over Wall
Street. The sum of 81. 5.000, ,oo0, 900 mem
toned as the first sum to be raised
by both bonds and atxation was SO
huge as to make II difficult for the
average person to grasp its magni-
tude. Immediately all sorts Of conjec-
tures were discussed as to the means
of borrowing such an immense
amount of money.
Bankers Gasped st Thought.
Later It was stated that there
would be a bond offering of $1,000
o00. 900 alone, OF which $4,000. 900 900
was to be used for the purchase Of
bonds of the allies at the same rate
OF interest as we were to pay, 3h
per cent, and the balance kept as an
emergency fund for ourselves. When
the bill was finally drafted and re-
ported to the House by the Ways and
Means Committee. It called for bond
Offering of $4,000, 900 900 and $4,000
oOO. 900 additional In indebtedness GER
tificates to run for one yeav and TO
be met bx taxation to be framed later.
washington authorities talked as
though the issue in its entirety was to
be put through Bankers here and else
where gasped at the thought They had
not been consulted. and they naturally
wondered how H. could he done. The
reperal belief prevailed that 1t wouhi
bs feasible only to float the loan In in
staIlments Of 8 900 100000 or N,5o00c.0O
at most, II the so much to be desired
result Of prompt and enthusiastic sub
scription were To be realized. The tax
exemption provision Is attractive, to be
sure, but principally 50 to the man Of
considerable means. 1t matters little to
the man who must withdraw q few hun
dred dollars from the savings bank
whether the bond he Is to buy Is tax
exempt or not. since the chances are
that such an individuals income would
not come within the income tax pro-
vision In any case Then there was the
worry about taxation 1t was first
feared that the Government would i'm
pose onerous burdens on corporation
profits. II was argued that taxes on In
dfvidual incomes were the proper means
Of raising war taxes, as the big busi-
ness houses would need all their re-
sources to hold their own in the busi-
ness competition that would follow the
ending of the war.
State of Nervous Uncertainty.
These and other considerations kept
financial and securities circles in a state
Of nervous uncertainty a good part of
the week. There was q more optimistic
feeling late in the week. because Of re-
ports from Washington that the bond
flotation and taxation projects would
be handled with the utmost conserva-
tism- There also came the realization
that whatever amount OF money was to
be raised in loans for use here or for
loans to the allies. the proceeds would
be spent here. This would seem to as
sure a solid basis for our commercial
structure for the duration of the war.
at least. although II Is probable that
the large profits which many companies
have enjoyed since hostIlities opened In
Europe two and q half years ago. can
not be repeated.
This Government demands, and
Justly so, that modest profits only
should accrue from munitions and
other supplies for its use, b"t II is
scarcely to be expected that so large
a percentage OF the country's output
of whatever nature as the full needs
of the allies call for could be sup
piled at Ine same rates as " a8nlnEIOn
would pay. 1t Is, of course, desirable
that our manufacturers should make
prices more reasonable than they
have they have been heretofore.
Numerous Causes for Cheer.
Besides the emphasis which the
bankers lay on the fact that this coup-
try was never better prepared for war
financially and industrially than at
the present time, there were numer-
Gus causes for cheer in the second
half Of the week. The Immediate re-
sponse OF Cuba and Panama In align
ing themselves with this country In
war against Germany was most graft
flying, and, as Improved, q good exam.
pie for the rest OF Latin-America.
Brazil dismissed the German ambas-
sador at Rio Janeiro and recalled her
own from Berlin. Argentina, Peru.
Costa Rica, Ecuador, and so on ex-
pressed their approval OF our course
and declared a state OF neutrality
with a strong leaven OF benevolence
The brilliant successes OF the British
arms on the western front. repeated
rumors Of peace, persistent reports Of
unrest within both the HohenzoHern
and Hapsburg dominions, all i'm
parted some degree OF color to the
assertion frequently heard that the
end of the war was nearer at hand
than most people realized. The Brit