New-York tribune., 1918-08-05

Further brilliant Allied successes
in Che Marne salient brought COM
paratively little response in the Sc
curity markets last week. Stock
prices moved narrowly when they
moved at all, and the trend, on the
whole, was uncertain and hesitat-
ing. The volume of speculative ac-
tivity continued at low ebb. AS time
goes on and the stock market con-
tinues in its present narrow range
it becomes more and more apparent
that other factors besides the war
outlook are exerting a powerful in
fuence upon values. Problems of
taxation are receiving more and
more attention, while the dearth of
money is unquestionably a restrain
ing factor of great Importance. That
American industry can stand heavy
increases in Federal war taxes on
the basis Of present operations
that is, in the basic lines, such as
steel, copper and the like-is gener-
ally conceded. But it is realized
that larger tax tribute exacted by
the government may mean a small
er share of the earnings for stock
holders, and it is the uncertainty Of
whether dividends will be affected
adversely that is disturbing senti-
ment.
The statement of the United
States Steel Corporation for the
quarter ended June 80, issued last
week, was reassuring develop
ment, however, although its publ
cation did not tend to stimulate
market activity. The corporation
broke all previous records in net
earnings before tax deductions, with
total of approximately $153,000,-
900. Out of this came tax charges
Of $91,000,O00, leaving $62,000,oo0,
and the balance available for the
common stock was at an annual
rate Of about 80 per cent share.
Of course, the position Of the Steel
Corporation among American COR
porate enterprises is exceptional.
Yet the fact that it has shown it.
self capable Of putting aside ap-
proximately million dollars day
for taxes and at the same time earn
at the rate of $31 share on its
junior stock may be accepted as in
dicating that fixed prices and un-
precedented war taxes have not vet
impaired the earning capacity.
What is true of the Steel Corpora
tion is probably true in a lesser de-
gree Of the smaller companies in
the steel industry and other lines.
Although conditions in the invest
ment market are quiet, such new
issues as are being brought out
with the approval Of the Capital Is
sues Committee are being we'll ab-
sorbed. Several new bits of financ-
ing by industrial corporations in
need Of fresh working capital are
being negotiated at the present
time, and the market will probably
have to take number Of new is
sues between now and the offering
Of the fourth Liberty Loan in the
latter part Of September. A devel-
opment of more than usual interest
in the investment market last week
was the announcement made by
Governor Harding of the Federal
Reserve Board to the effect that
the plans Of the bankers for or
ganizing an intermediary company
to take care Of the financial re-
quirements Of the public utility
companies have been upset by a
ruling by the Attorney General. It
had been hoped that a plan might
be worked out whereby this pro-
posed corporation would purchase
public utility securities, itself re-
ceiving advances from the> War
Finance Corporation. Now that it
has been found that the War
Finance Corporation cannot make
advances Of the amount that would
be required some other way will
have to be evolved to meet the
needs Of the situation. Foreign