The Bridgeport times and evening farmer., 1918-06-05
WatSOn'S
Weekly
Letter
IIIIIIIIIIIIIIrIlHIIIIIIIIIllIIInIIIIIIIlIIII


ave zone had short selling conditions
,een normal. In turn, the retreat
R.rorn high levels has been just as SEN
Rational and largely owing TO the ao-
,ence of short interest due TO the ao-
normal restrictions placed ABOUT OPP
srations Of that character. In otner
words, the market has lacked a std-
oflizer, is not as liquid" as formerly
and its activities again prove the
worth of speculative freedom on poth
,ides. There has been no change IN
fundamental conditions upon winch
he elevation of prices was based. Inc
,uperfcial factor of war taxation mas
become prominent sooner than was
expected, upsetting speculative calcu-
atoms for the moment. But the gooo
,rop outlook is even better. Prepara-
ions To take care of extraordinary |
monetary transfers next month are adj
ranced further than heretofore. There |
evidence of greater harmony in the
United States with regard to war pro-
ress-and incidentally In the Repub-
lean Party through the Taft-Roose-
5elt meeting. A great advance in ralf-
-oad rates has followed the raise in
wages. More efficient employment OF
abor has been provided for by the /
Federal Governments military orders.
A huge over-subscription to the Red
Cross call is a gratifying indication
as was the Liberty Loan increase in
Individual subscriptidns-of the awak-
sning Of the people and consolidation
Of their war power. While the Ger
nan drive is unsettling and naturally
causes apprehension, there are not
acking signs of better preparations,
greater confidence and more counter
offensive readiness than during the
asst effort to reach the Channel ports.
rhe period of liquidation and read
ustment in the market for securities
would now appear to be behind, with
he probability that we have entered
Ipon a broad and constructive period.
''If the recent rise in the stock mar
get were. justified there was a reason
or n, and if there was a reason for
t, thaGe is no reason for the present
decline" These words are quoted
rom a private interview with prom
nent banker. He continues: There
only one anxiety confronting us in
1918 and that has to do with income
ak payments on June is. This is not
likely to create any disturbance in the
money market because trouble looked
or never arrives. The Liberty Loan
o come in October is not a disturb
ng factor. We have known all along
hat this must come and shall over
subscribe it as enthusiastically and
oyaIIy as we have any of the others.
We are looking for a large increase
n deposits after the June Is income
ak payments. If income taxes go up
is safe to assume that earnings will
also, and it is quite certain that, when
he war is over and income taxes are
abated, the U. S. Steel Corporation
will be able to earn more than in pre-
yious peace years even if prices for
steel are scaled down proportionately
@ the abatement in the tax levies.
Railroad stocks which pay the highest
dividends and get proportonately the
highest lust compensation should, in
my opinion, be bought. Railroad
stocks paying dividends are practically
Is sure of them under Federal opera
ion as the junior bonds of getting
heir interest under private ownership.
Union Pacific stock, to sell on a 6h
Der cent. basis, would have to advance
35 points from the present level" 1t
would seem that banking channels are
not at all alarmed over the new tax
alton or the German drive. Good
sources are credited with taking
stocks on ascale down in both the in
ausrrial and railroad standard lists.
On account of the prominence Civ
IN to the new taxation program, there
has been a diversion of speculative
interest from the general industrial
list to the railroad department. Con.
tributing to this tendency has, o,
course, been the higher freight rate
announcement. In no small part ha:
New Haven's strength and activity
been an encouraging factor in thi
connection. An advance in New
England traction fares, following tn,
elevation of railroad passenger ant
freight rates and financing aid TO
the carriers, would probably stimu
late further interest in New Haver
The fact that the railroads need no
fear taxation measures, is a powerful
incentive turning attention to then
Furthermore, they give high yields i
many cases. Coaler rails eSpeclall
are attracting investment speculatio
on an expanding scale because of tn
large revenues provided by the grow
ing demand for fuel. There is
strong feeling that the outcome of tn
taxation revision, should it impos
heavier burdens upon the copper pro
ducing companies will result, as j
tie case of wages and rates for I'll
s~1lroads, in the Government raisir
the price above $3.50 a pound. Viii
some of the smaller companies may
forced to suspend, it is claimed TIL
better and more efficient distribute
Of labor can thereby be effected, pc
uniting the big producers like An;
conda and Inspiration to give max
mum output. 1t is estimated tn
the average operating cost is no
near tic pound before taxes and d
pletion. The justice of higher fix
price is therefore apparent.
The Argentine corn crop is estima
ed at 4335 900 tons of which 800 0