The Birmingham age-herald., 1917-07-01
STOCK MARKET RESTRAINTS

stant to talk for publication over his own
 name; but with the stock market the case is different. It is very rare for one of the big men in Wall street to talk about the stock market for publication; some thing wholly unexpected may happen any
 minute, to change the entire outlook, and then the charge can be made
 and usually is, by unfortunate specula- tors. that the financiers talking for publi- cation was only doing it to influence sentiment for the benefit of his own pocketbook. Sometimes when conditions
 are just right, snappy, pointed inter- view with a prominent Wall street man
 can do lot to swing the stock market
 either one way or the other. Hence the
 well known dislike among the big tinan- ciers for interview on the trend of the stock market. T don't mind telling you the way 1t looks to me, if you do not use my name" the Wall street banker in question re- piled this week, in answer to a direct question as to what he could see ahead in the stock market. T can see a great
 bull market, the biggest bull market this country has ever experienced. There probably will be hesitation until this ex- cess profit tax question is settled by Con- gress, but after that there will be cheap money, lots of it, and large manufacture ing profits. Those conditions will make bull market in stocks.
 "A great many people who are pessi- | mistic regarding the outlook argue that England. with all of her imitation and
 industrial activity, has had no bull stock
 market. But there is a great funda-
 mental difference between the United States and England Over there the | money is going out of the country; here
 1t is coming in from the outside and staying.
 Of course we are going to have heavy excess profit taxes; but even so there will be large divisible surplus remain ing, the largest surpluses applicable to dividends ever reported by our industrial companies.
 That is the first big factor influencing
 me in my conclusion that big bull stock
 market is ahead. The next big factor is that the rich men will not be able to take their profits, either in manufac- turing plants or in the stock market
 They must hold on; and that holding on will be guarantee against heavy l liquidation. But for the restraining in- | fluence I have in mind, the rich men
 would make rush at the first opportun- l ity to take profits, and the effect of that | liquidation in industrial stocks would be exactly the same as the effect heavy for eign selling of American railroad bonds and stocks had on the market here for railway securities in 1914, 1915, and 1916 iul Aoi tiht llOoo OL IOEtlSn AQuludtiOu, we would have had bull market on rail- road stocks in 1915 and 1916.
 Here is why the big men will not be able to take profits, but must hold on
 until after the war is over: Take a man who had, say s1o0.0o0 actually invested in an industrial plant before the war broke
 out. With war profits piling up that
 original s1oo,oo0 has grown, to s1,ooo,0oo.
 But If he sells now he must pay heavy sur tax on profits of sS0o. 900, and the same Is true of the rich man who bought. say, 1000 shares United Steel
 common around Sl00 share and has seen it go to s1S0 a share. He Is now getting dividends of IA per cent on that stock or $14,O00 annually, and hence will have to pay an income tax on only s14,oO0. If he took his profits, which would amount to S3o0o0, he would have to pay the sur tax on that s3000O profits. Hence you see there is nothing for the rich man to do in the stock market but hold on He can't take profits without giving up too much, and his holding on will be a guarantee against liquidation. R. L. B.