South Bend news-times. (South Bend, Ind.) 1913-1938, 1917-09-24
IN MONEY
FEAR IS RELIEVED
Improvement in Security Mar
ket PaVeS Way for
New Loan.
BY HENRY GLEN :
New York Banker.

ment that SO clearly has been shown
in the market for securities this
week seems mainly a response 10
the removal Of fear of strain I'm
money. IL may, too, be ascribed TO
widespread belief. which uHdOubt-
eddy has foundation. that no effort
Will be spared in patriotic financial
circles TO promote a cheerful feel
ing in the investment markets dur
ing the period the new loan is be-
ing publicly subscri bed. There
could be no greater handicap against
the success of the loan than 70
have a spirit Of pessimism prevail
at that time.
For several weeks there had been
evidences Of scarcity Of funds avail
able for fixed maturities. This was
in no sense unnatural in view of
the heavy demands that were in
sight. Lenders also were inclined
10 discriminate against collateral
comprising all industrial securities.
thus bringing into prominence a
situation that had during the recent
asst been developing so gradually
that its full significance was not at
once widely appreciated. That is TO
say, transactions in industrial secur-
tiles on the New York stock ex-
change have on a constantly increas-
ing scale been becoming the basis
of active operations. 1t thus hap
pened that when lenders became in
sistent upon mixed collateral-se
curities Of railroads as we'll as in
duStrials-the supply of the former
was restricted.
Loans are Provided.
At a meeting of influential bank
officers comprising a subcommittee
of the Liberty loan committee Of the
New York district this matter was
taken up and the conditions were
frankly discussed. The practical
result was that q considerable sum
sufficient to relieve the money stu
alton was loaned out for fixed pc
RODS and all industrial collateral
accepted for the same. BY doing
this the banks, in my opinion, have
taken a most necessary step to as
sure the successful distribution of
the governments new bond offering
which is to be announced as soon
as the enabling legislation has been
finally enacted.
The new bonds. according 10
present plans Of the treasury, are
to bear 4 percent and will be con-
vertible, as in the case of the 3 1-2
percent issue of last June. into any
higher rate bonds that the treas
ury may find il desirable TO issue
during the continuance Of the war.
They will not, according to present
plans, be subject to taxation, except
20 estate impOsts and 10 the surtaxes
on incomes. The latter are so
heavy. as imposed by the new rev
enue law, that there will still exist
incentive for large interests TO
utilize the older 3 II percent bonds
because of their fun tax-exempt fea-
ture. This, in connection with their
convertibility, explains the substan-
tiai demand for the older bonds
that has been shown during the
week
With the Improvement in the
money position. which promises to
continue during the period covering
the Offering Of the new government
securities, there already has devel-
oped. as has been stated. a much
steadier and more confident feeling
on the general market for securi-
ties. Advices from Washington that
seem to bear the direct stamp of re-
sponsibuity suggest that the admin
istratiOn's policy in connection with
its price-fXing plans viii. when it
finally becYmes known. be found 10
be sufficiently liberal, 10 justify the
belief that profits 20 be obtained by
our manufacturers for their prod
ucts will be satisfactory.
No PrOfteering.
Excessive profits are not 10 be
tolerated; they would be unpatriot-
fc. on the other hand, our manu-
facturers must obtain returns suffi-
Gent TO enable them TO carry on
their highly important part Of the
work Of defeating the enemy. Profits
must not be so small as TO handi-
cap their activities. Speed of pro-
duction still is necessary. Profits
must permit the very highest de
gree of production
The new war revenue bin will
soon be on the statute books. In
come taxation will be very heavy.
But neither this nor the excess
profits tax will be as cOniscatory
as some Of the more radical mem
bers Of congress have desired. We
all must do our share in what viii
undoubtedly always stand out prom
inently among the greatest cities Of
the world The staggering figures
that are being granted in the form
Of appropriations. and the bond is
sues and the forms Of taxation TO
provide for these appropriations, all
are merely a measure Of the deter
mination Of the administration 20
bring 10 bear AT once the very ut
most Of our fighting efficiency, IN
order that the conflict may BE
brought as promptly as possible 10 a
victorious close. II is no time for
half measures.
Sacrifice Must Be Borne.
We have already surprised the
enemy by sending 10 France a con-
siderab bile army Of clean-cut, intelli-
gent men who are eager and able
10 fight for democracy. We must
continue sending we'll equipped men
until we have an army that will by
its strength. intelligence and deter