New Britain herald., 1917-04-28
Henry Cleus
 Weekly Letter
Especial to the derald.)

1 Especial to the Herald.)
 New York, April 2s.-More and l more the security markets come 1 under control of the war. This week i the American loan to the Allies was the chief factor. On Wednesday our government loaned $20O. .00O, 900 to the British government; the first trans action under the new $7,O00, ,OOO, 900 war measure. So perfect were the ar arrangements and so skillfully were they carried out, that this huge trans action, the largest of it's kind in our history, was carried through with only a ripple in the money market. It Is the first of series of similar transactions with our allies which will continue while the war lasts. Italy, France and Russia may also seek pro- portionate aid, and there is every reason to believe that our govern ment will regulate all these trans actions in a fashion that will leave the least disturbance. The extent of these
 issues will of course depend upon the
 length of the war, and it is unwise to
 delude ourselves with expectations of
 very early peace. Now that the
 United States has joined the Allies. their victory is more certain than ever, but the ability of Germany to
 keep up she war is not yet exhausted. while owing to internal dissensions< the
 Russian outlook is not entirely satis- factory.
 The effect of the s7,o0o, 900, 900 loan will unquestionably be stimulating in some respects. There is no doubt whatever but that the issue will be tremendous success and largely over- subscribed. That of course will prove encouraging and will promote confl- dence. Then the bulk of this huge sum will be spent at home for supplies of all sorts. benef1tting many indus tries and Altering through many channels of trade. By issue on the installment plan imitation will be kept down to minimum, though for minerals metals and products of the same high prices must be expected as long as the war continues. Our farmers, too, are sure of good prices; so the activities induced by war are by no means at an end. At the same time it will hardly be prudent to over- look the effect of withdrawing such vast sums from the ordinary channels of investment. Eventually this whole sum must be taken out of profits and savings that would otherwise go large ly into new enterprises. The pros- pect of seven billions of new govern ment bonds being placed on the mar ket in comparatively few months Is a factor that cannot be ignored. This seven billions will be devoted chefiy to destructive and not constructive purposes. which means that many concerns new and old wanting capi- tai applications have been almost en- tirely suspended. and while the same will not happen here. still the amount available for such purposes will large- 1y contract. Capital will be relatively scarce, and like other utilities will command high rates. This may mean higher rates of interest for an indefi- mite period and a general adjustment of investment values to new enxiron- ment. While the tendency of values to fall under higher interest rates will be offset by continued high profits, it should be remembered that the latter will be reduced by the great rise in expenses and the proposed heavy taxes upon war profits. Added to these drawbacks are the vast un- certainties of the war, such as a German collapse or a set back to the Allies, either of which would tenn porarily affect values. The relatively
  spite of almost unimaginable profits, can only be attributed to such dis trust of their continuance. How long general imitation will go on is beyond human foresight; the only possible | check at the moment being exhaustion of buying power. which is not yet in l evidence except in a few cases.
 The American food situation is a serious one, although there Is no occa- l sion for alarm and least of all for l hysterical action. A reasonable in- crease of production together with | general economy. which high prices l will accomplish more surely than any 1 government interference. will soon | bring at least partial relief. Com | plete relief cannot be expected until | the war ends and indeed some time | after. The food problem is not ours | only. it is warld problem. induced 1 by the great war which has taken mill | lions of men from agricultural pur- l suits, at the same time immensely | increasing the waste of food. The i! menace of scarcity in this country is ] small, compared with what it is l abroad: but the production of food, l both grain and meats, has mot begun ' to keep pace with the gain in popu- |; lation. while our exports have in creased immensely owing to the war. We are now facing the new crop season which may result in a partial ]! lowering of food prices. Recent [ weather conditions have been more favorable.
 No settled tendencies can be dis covered in the stock market for or