The Bridgeport evening farmer. [volume] (Bridgeport, Conn.) 1866-1917, 1917-09-25
HENRY CLEWS
WEEKLY LETTER

7
Improvement that SO clearly has
been shown in the market for securi-
ties this week seems mainly res
ponoe to the removal of fear OF a
strain in money It may. too. be as
cribed to widespread belief, which
undoubtedly has foundation that no !
effort will be spared in patriotic fl
nanciaI circles to promote q cheerful
feeling in the investment markets
during the period the new loan is be- |
ing publicly subscribed. There could |
be no greater handicap against the
success of the loan than to 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 to dis
eriminate against collaterals COM
prising all industrial securities, thus
bringing into prominence, situation
that had during the recent past been
developing SO gradually that its full
Significance was not at once widely
appreciated. That is to say, transac-
tfons In Industrial securities on the
New York Stock Exchange have on
constantly interesting scale been be-
coming the basis of active operations
II thus happened that when lenders
became insistent upon collateral-se-
curities of railroads as well as indus
trials-the supply Of the former was
restricted.
AT O. meeting of influential bank Of
ficers comprising a subcommittee of
the Liberty Loan committee of the
New York district this matter was
Iaf
frankly discussed. The practical re-
suit was that considerable sum suf-
ficient to relieve-the money situation
was loaned out for fixed periods and
all Industrial collateral accepted for
the same. BY doing this the banks,
in my opinion. have taken most
necessary step to assure the success
full distribution of the governments
new bond offering which is to be an
nounced as soon as the enabling leg
fslation has been finally enacted. The
new bonds, according to present
plans of the Treasury are to bear 4
per cent, and will be convertible. as
in the case Of the 8 Ia per cent. is
sue of last June, into any higher rate
bonds that the Treasury may find 1t
desirable to issue during the continu-
ance OF the war. They will not ac-
cording to present plans, be subject
to taxation, except to estate irnposts
and to the surtaxes on incomes. The
latter are So heavy. as imposed by
the new revenue Lazy, that there. will
stiu exist incentive for large interests
to utilize the older 3 IL per cent,
bonds because of their full tax-ex-
empt feature. This, in connection
with their convertibility, explains the
substantial 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 lettering, lof the anew government
securities there alEeadya has develop
ed, as has been stated, a. much stead
Ter and more confident feeling on the
general market for securities. Ad-
vices from Washington that seem to
bear the direct stamp Of responsible
ity suggest that the Administrations
policy in connection with its price.
fixing plans will, when it finally be.
comes known, be found to be suffi
GENTLY liberal to justify the belize
that profits to be obtained by oul
manufacturers for their products will
be satisfactory. A very practical and
significant indication of this Is tn.
23 1-2c per pound announced as thu
purchase price for copper. There. O.
course, is no likelihood that we are t.
have anything like an early return t,
the conditions that existed before ou
own entrance as an actual partici
pant in the worldwide struggle 70
democracy. At that time we wer
selling to buyers who were anxiou
and willing to pay high prices, whicl
would act as a direct incentive t
speed up production. What was mos
needed was promptness Of deliver
of war material of all kinds in orde
to diminish as far as possible tn
handicap OF being SO completely un
prepared against an enemy whose en-
tire organization was tuned to tn
highest pitch of efficiency. Today
IN our own country that Is paying tn
bills not alone for supplies for GU
own military and naval organization
but we are lending the funds to wha
now are our formal Allies in orde
that they too may pay our manufae
turers for similar purchases. Thu
excessive profits are not to be tolera
ted; they would be unpatrfotic. o
the other hand, our manufacturer
must obtain returns sufficient to en-
able them to carry on their highl
important part Of the work of defeat
ing the enemy. Profits must not b
80 small as to handicap their activ
ties. Speed of production is still ne
cessary. Profits must permit the yer
highest degree of production. Gu
governments shipbuilding plans, fo
instance, require that every ounce {
iron and steel that can be, shall h
produced this year and next. tn
tonnage must be measured by tn
yardstick Of millions. This is symI
tomato Of other branches of our ms
tional activities. Hence If, as is to /
expected, prices are reasonably pro
table the industrial plants of oil
country have before them long pc
fod Of uninterrupted business. 1t
obviously desirable as a, step in II
direction of promoting the full su
cess of the new loan offering that Il
price-fixing fear should be prompt
and definitely delayed. Resales
pig from, for instance have been r
ported this week at reduction OF
per ton from former prices. The
has, too, been a reduction in 9th
branches Of the metal market. Tn
uncertainty hardly can fail to Il
crease. Construction IL not likely
proceed without restraint when the
is a prospect of lower prices later b
coming available in basic materials
The new war revenue bill will SOC