The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1917-05-24
CONDITION OF MARKET
EXPLAINED BY EXPERTS
ADJUSTMENT TO THE WAR AND
UNCERTAINTY OF COR
PoRATloN TAX.

market conditions. Hayden, Stone &
Co. say.
The distressing and the disturbing
I feature of this market, to our mind,
| is that While the problems surround
/ ing us are all admittedly extremely
serious, yet even they can not be re-
garded as accounting for more than
part of the continued liquidation. Last
week it was the submarine peril and
the Russon situation that were ad-
vanced as the principal reasons by
most commentators, yet we have been
assured on high authority that the
submarine menace can be overcome,
and while the Russian situation is SER
ious, apparently the climax has been
passed. This week attention has been
particularly turned toward taxation,
yet every one knew that heavy taxes
had to come, and While those proposed
are large, there is nothing vicious
about them; they are probably not
much worse than generally expected,
~
causes to find a satisfactory eXplana-
ton of the continued selling.
Fear of Excessive Taxes.
I'VE are inclined to believe that
there are two underlying causes, ra-
Their indefinite in their nature yet
powerful in their Influence. The first
is the fear on the part of the holder
of stocks that companies in which he
is interested will not be allowed u fair
opportunity to earn the heavy taxes
which they will be called upon to pay
and which, as a patriotic citizen, he
is perfectly willing that they should
pay. There is, we believe, the fear,
perhaps not fully defined, that not
only will companies have to pay di-
rectly the heavy tax that is proposed,
but, indirectly, they will have to pay
it two or three times, or perhaps a
dozen times over 1t will be observed
that the liquidation has been heaviest
in the high grade railroads, street
railways and other public service en-
terprises that would come most di-
rectly under government control. This
whiting away of market capital is
really the worst thing that could oc-
cur if the government taxation pro-
gram is to be q success 1t IS killing
the goose that lays sthe golden egg
with a vengeance. A word of reas
surance on this point, favorable de-
cision in the rate case would not only
be worth a very great deal to the
holders of corporation securities in
allaying their fears, but what is of
much greater Importance, it would be
worth many millions to the govern
ment in it's venenue raising power.
Adjustment to the War.
THE second reason for the liquida-
ton we would define as a general
financial reimbursement to war condi-
version of the usual stream of invest
ment funds from the stock market to
government bonds. There are always
stocks for sale, but ordinarily, there
is sufficient capital seeking investment
to take care of such sales. Tempo
rarily, however, this absorptive power
has been largely eliminated by the
desire to subscribe to government
bonds. The market has been QUICK
to sense this and, as is usual, rather
overemphasized it; probably this pro-
cess has been nearly completed.
"As against these, indications that
the government is calling into its SER
vice men of recognized business ca
pacity is encouraging. 1t is most
earnestly to be hoped that these men
will be given absolute power Of di-
rection and not merely used In advis-
ing those who may or may not act on
their advice. The more evident dis
position of the government to pay
market prices for commodities is also
encouraging. No fair minded man
has any desire to profit by the needs
of his government or by the worlds
distress, but it, America is going to
be the power in this war that we all
hope and expect, every possible. means
must be taken to conserve its income
earning capacity.
Business Continues Good.
"The testimony of eminent business
men on foreign commissions that bus
mess though. of course. readjusting
itself to war conditions, has, on the
whole, continued good, was decidedly
reassuring.
ut is a most trying period through
which we are now passing. We are
experiencing now the financial diff
Guilty incident to an adjustment to
war conditions; later on there will
come the financial benefits that al
ways result from such conditions