The Bridgeport evening farmer., 1917-09-10
HENRY CLEWS
 WEEKLY LETTER

As indicated in our previous re- view, the heavy liquidation in stocks dur4ng the last three weeks was due primarily to fright induced by the radical outbreak in Congress. The evident desire on the part of certain political clfues to penalize- wealth oy confiscatory taxes whenever and wherever possible, the realization, too, that the era of profiteering has about finished, and, finally, the unfound9d rumors that the Government was 10 take over the railroads gave the bears an usual. opportunity. Professional raids were frequent and successful, meeting with no effective resistance from the big holders of securities. < Unconsciously the radicals in Congress played right into the hands of the very speculators and man1pulators they most desired to punish; but the the foolish and misguided desire 10 injure wealth Is unfortunately stlll alive. It dies hard, even in Congress which by this time should have learn ed that it is injuring It's own pest friends by such tactics. Wherever capitaf Is struck, 1t promptly seeks l. kindlier, environment; enterprise van
 
 1 profits are attacked, savings decline, there is less money to spend, and the supply of capital is dried up at it's prl- mary source That ignorance or the z simplest economic laws still rules where reason should prevail is oo- vious. and lawmakers go blunder1ng i along in their confusing career; the public meanwhile suffering. from the folly of such experiments. Happily ] the radicals were badly routed in the < Senate vote on the Revenue Bill on wednesday, and the efforts to impose i. nracfically confiscatory tax on pro- fifs proyed a. significant failure. ln- stead of the a easuEe ipo which it was proposed to impose taxes on pronts ] of 10 to 80 per cent. the bill as amend ed by the Senate increased the Fed /, eral taxes only s1.06O, 100000, a sum
 which can be raised without any harmful effects. The Senate as a whole I is evidently disposed to act rational '. ly. The Administration is known 10 be firmly opposed to extreme action' realizing full well the paralyzing con ssai,ences Of closing up the springs of capital sa9
 Tn the matter of price fixing the government is also pursuing a reason able course In no case, unless 1t pc {, that of soft coal, has there been any radical changes from present prices. On the contrary, figures have been allowed which will grant producers liberal profits by preventing cratic and extreme speculative fluctuations a degree of stability thus being intro .duced into industry which should prove satisfactory to all concerned. Merchants. are thus being freed rom embarrassing uncertainties and con- fident in the, stability of prices are |, more able to make plans. extending into the future. The public mean while is protected from further ex- ] tortion, while sufficient porfits have bcen allowed to stimulate production To this extent the business situation has been improved, although as steadily maintained in these advices government price fixing is uneconom- Lie, ,unsound and can olny be accepted strictly as a war measure.
 Y No change can be recorded in the war outlook. Peace talk Is very ac- tive. It is apparently inspired by consciousness of weakness in German i, circles. No one believes Germany is ready to submit to the> terms whicf are sure to be, insisted upon by the Allies, who are making vigorous pre-
 
 campaign next spring. A few strik ing tendencies are obvious in curren events; first, the rising strength O the Allies in men, morale and muni ttons, and, escond, an equally stead. fall, of the same in all of the Centra Powers These contrasts in strengtl between the opposing forces arr growing rapidlys they are materiall, intensified by the economic starva tion of Germany. and when spring ar rfves with a big efficient American army fresh in the field, backed b, npractically unlimited resources, thel there may be reasonable hope for ; peace dictated by the Allies; a peac that will be based on victory an, based on just reparation and restitu ton. No wonder the Central Power would like to make peace and g home before the storm which the bAewed breaks furiously upon then and gives them a taste o& the suffer ing they have so cruelty inflicted up on others.
 The advancing tendency in interes rates is a constant though general overlooked influence in the stoc market. The colossal waste and ah f sorption of capital can have no othe effect that to produce higher interes 7 rates. Even with the enormous ac cumuiation of profits, out of whic capital comes, the. demands upon ou resources for ourselves and the Al lies draw money very seriously fror new enterprise. Capital, like an other commodity or service demand and secures better rates of compen sation as a result of war conditions Under such circumstances many SC curities, particularly those of tn highest class, must readjust them selves to higher interest ratcs In oth CT words. Hrehe ref3rnsEon capital ar fixed; lower prfcesE follow inevtiabl, Last weeks bank statement was tem ,porarily unfavorable, and this result cd in transient high rates for none, These four factors, the revenue bil price fixing. firmer money and radio ,alism in Congress, created a scar among weak holders of margine stocks which professional operator
 used as a means for depressing tn stock market. Security values no
 are at a point which should attrat renewed investment buying. It
 true that the future is still full of UT certainties. ShouI the war last ar other year, as many believe, the pre-. ent rate of expenditures by our go, ernment, which has not only us ow operations to finance but those of tn Allies. may act as a further depres, 4~x-~ Ga -k~ c5-