The sun., 1918-08-18
FINANCIAL NEWS
AND COMMENT
First Liberty Issue Advances
to New High Record in a
Dull Market.
EASIER MONEY FORECAST
Decision to Omit Customary
Treasury Offering Is Re-
gardcd Favorably. p

Tho major portion Of the active list
In yesterdays short session OF the stock
market. which was restricted In volume
and entirely professional. was dull and
traders had to turn to n few specialtics
and Liberty ANS to ind any feature
worthy Of comment The senior Liberty
tax exempt issue scored a new high
record by rising to 100.50, compared
with 97.20. the low for the year. and
the previous high record l00.3C made In
September Of last year. General Mo-
tors. on ths~iast day of participation In
the Stock Exchange clearing house.
gained two points. American Telephone
and Marine shares found speculative
favor by gaining fractionally but else
where tho changes in price were lnsig-
nifcant Total sales were only 100000
shares For most Of the two hours the
market was at n standstill and trading
was particularly narrow:
The limited number who came to. the
financial district spent most of their
time digesting the Treasury Depart
ments tax programme and the unex-
pected omission OF the usual fortnightly
offering of s5o0.o00.00o treasury certif-
icates OF indebtedness. Genuine opinion
on the tax situation IL expected 10 be
reflected in next weeks markets but
available influential opinion was that
the proposed measure is fair and equit-
able. with its heaviest burden on con-
Germs which have been engaged In prof
iteering. The next step In to make the
necessary adjustments to meet the new
tax burdens and business men and cor
porations have the opportunity OF sub
scribing promptly to I per cent. certif-
icates which can be used in payment OF
the taxes next summer. The tax recon-
mendations have been largely antic-
ipated and discounted by the financial
community and the new certificates will
afford a greater amount of interest on
moneys reserved for taxes than the
banks can pay on credit balances. De-
creased individual and corporation de-
posits with the banks are now looked
for. but this should have little effect on
the loaning power OF the banks.
Tho temporary relaxation In tho
money market. forecast here, Is added
to by the decision to omit the fortnightly
offering of $500. 900. 900 certificates. which
should ease the strain the banks have
experienced during the past week
Further omissions depend upon the
volume Of subscriptions to the tax Ger.
tificates. The removal OF the uncertainty
over taxation should be beneficial, nc
matter how great the tax burdens on In.
dividuals. partnerships and corporations
The bank statement disclosed a de-
crease in surplus reserve Of $l0,76h, 800
making that item $30.074.0so. the loves,
since July 6. and with that exception
the lowest since April 81. The reduction
was due indirectly to the Withdrawal
of United States deposits. against which
no reserve Is required. At the begin.
ming of business yesterday the Govern.
ment deposits were $44:.9<9.0O0, com.
pared to s522.3lO.O0O the week before
and to S494,9S2,oO 600 In the average state
ment. Net deposits against which re-
serve is figured increased $s,sS4.000
while cash reserve fell of more thar
$l2 1000. 900. An interesting feature wal
the comparison Of the loan item In ths
actual statement with that in the aver.
age statement. In the latter loans de-
creased s3l.333. 900: in the former loani
| increased $47.995. 900. This comparison
indicates a great contraction on Friday
the day of heaviest Withdrawals Of United
States deposits To meet these with
drawals there was a 10 per cent. expan
sion In borrowings from the Federal Re
serve Bank, that institutions bills dis
counted and bought item going abov,
| $3.50. 000.o 900. The foreign exchange
market was fractionally easier. witt
business light and featureless.