Evening star., 1918-08-04
BY I. A. FLEMING.

By I. A. FLEMING.
General investment business. other
than in short-term notes and especial
ly high-grade bond issues. is more OF.
less at standstill. failing to respond
to the war news, the best of 1918,
and to other factors that In times
Of peace would have decidedly slim
ulating influence.
Even the best of the short-term
notes must be around per cent
basis to attract attention.
The great quarterly showing Of the
United States Steel Corporation for
the second quarter of 1918 was not in
fuential enough to cause even mod
crate squirt in the stocks of the cor
poration despite the fact that it pays
a million a day in taxes to the gov
ernment and has demonstrated abil-
ity to make great net earnings in
addition to this burden.
Railroad shares are as dull as pos
sible, with only now and then a sale
on the stock exchange. holders of
stocks and bonds holding on as best
they can and waiting, in hope that the
government will do the right thing
in final adjustments.
The executive head OF the Amert-
can Telephone and Telegraph Com
pany gave out an interview in which
he sets forth his belief that the sell
ing Of the stocks of that corporation
in anticipation Of government con-
troll, now complete. is all wrong. and
that, in his opinion. the property will
be carefully and conservatively man
aged for the best interests Of the Sc
curity holders.
Despite this assurance there are
those who differ from Mr.. Vail and
who expect sharp wage increases as
the first step under governmental
control of the great system. under
the urge of employees.
Clearly. the dominating influence of
the day is not the war. but the war
taxes. as suggested by the hearings
before the ways and means commit
tee. 1t may be that the demands of
the prosecution of the war will bring
the 10 per cent normal tax. as sug-
gested; that heavier excess levies
will be scheduled. etc. and that the
long list of taxes may be necessarily
heightened. The strong possibility
of this action has checked invest
mentS and will continue to do SO.
The demands of the nation in the
existing crisis must be met, and the
temper of the people today is such
that small urging will be necessary
to float the fourth liberty loan. In
like manner, the impost of taxes, IL
Justly apportioned. will not bring
much grumbling.
Spending the Money in Advance.
In order to postpone the fourth
liberty loan through the period of
tax payments incident to the income
and excess profits taxes and through
state and municipal taxes as well
the anticipation of the fourth loan
has very largely expended the funds
before the opening of the campaign.
Three bi-weekly sales of 750,000.000,
or $3.50 10000 in all. have been sue
cessfully made. and large sales will
occur bi-weekly until the loan is mar
keted
1t is probably a fact that the big
men of the country understand that
of the 1915 income taxes. will not be
long postponed, for the money must
be forthcoming to back the fighting
men who have crossed the seas, and
that this has kept the stock market
moving slowly and steadily in narrow
lines.
If necessary to put on brakes to
keep it in this condition. the bank
ers of New York hold the power and
will not hesitate to apply it.
American Bankers Convention,
The annual convention of the Amer
ican Bankers Association, the blue
ribbon event of 1918, will be held in
Chicago the week beginning Sep
George W. White, Corcoran Thorn,
| r. N. Harper, H. H. Mckee. Cuno H.
Rudolph. A. s. Gately and w. T GAL
liner. local bankers. are expected to
attend the convention. while several
other bankers of this city are con-
| sidering attending.
The subject for discussion. as ar
ranged by the executive council. is
the much-discussed federal reserve
banking system.
4 standpoint of member banker, from
| the viewpoint of a non-eligible bank
| er and from the viewpoint of an eIigi-
| Bile non-member. From previous dis
cussions before this organization
have come recommendations for
been of incalculable value to the
banking fraternity and to the system
as well.
The Federal Reserve Law.
| One of the questions that might be
discussed at this convention nigh,
| properly be: How would the United
States have financed the present war
but for the federal reserve law"
1t has been the medium by which
| enormous business transactions have
been cared for; bankers have found
their burdens relatively lessened by
the rediscounting facilities: the cror
| movement and the cattle feeding oi
the nation have brought no string
| ency for the same reason.
So far 1t seems to have met every
| demand made: it has made easier the
iotation of loans into the billions
where in the days before its existence
| crop movement and great activity
elsewhere would more than likely
bring on stress II not panic
1t has made the real assets of the
nation largely liquid and negotiable.
/ The A1drich-Vreeland emergency
currency law, good measure that i,
was, saving the nation at the out
| break of the European war, would moi
have served in the present crisis.
In those days the United State.
worked in millions and today in bill.
lions.
Bankers today are generally unani.
nous in their praise of the system
though many still complain over the
loss of interest, through the neces.
sity Of maintaining all their reserves
with their regional bank.
lacking Up Bankers.
The director of sales of the Sar