New-York tribune., 1918-09-23


Mills Building, IS Wall St.
Liquidation forced by the new
market restrictions as ap-
piled to Stock Exchange loans prac-
tically ceased last week, having run
its course. Consequently, security
prices steadied and the general mar
ket relapsed into a state of inactiv-
ity. 1t is probable that such state
Of affairs will continue until after
the fourth Liberty Loan campaign,
which will be inaugurated at the
close Of the current week. All eff
forts of the financial community are
now being concentrated upon max
ing the impending operation a sue
cess, and while the campaign is on
quiet stock market will naturally
be in order. During the last week
the news has been almost uniformly
favorable, chronicling Allied sue
cesses on several war fronts, but
apart from a general tone Of firm
ness displayed by stocks the market
made little response. We're it not
for the control exercised over the
money supply by the bankers COM
mittee it is more than likely that
we would have seen a considerable
expansion of speculative activity.
The markets absolute indifference
to the Austrian peace proposal,
stock prices being, to all outward
appearances, unaffected by either
the Vienna note or by the prompt
rejection of the offer by President
Wilson, furnished striking exam
pie of its stolidity in the face of
current developments. AS regards
peace, Wall Streets view is and has
been all along that the war must go
on to victorious conclusion, with
peace dictated by the Allies.
Naturally, the general investment
market has come almost to a stand
still, with the entire financial com
munity preparing for the loan cam
paign. The demand for investment
securities, long and short term alike,
has slackened for the reason that
sales are not being pushed with the
vigor that might be expected were it
not for the impending government
operation. Prices have shown a ten
dency to ease off as a result of the
slackening demand and the tight
money situation, but the movement
is not pronounced and there is no evil
dence Of liquidation. Whether the
offering of the Liberty Loan will
bring important liquidation by in
vestors who find themselves COM
PEELED to sell out present holdings
in order to subscribe their full quota
to the government fotation remains
to be seen.
The market for municipal and
state bonds has gone fiat as result
Of the incorporation in the new
revenue bill of clause which would
make taxable the income from new
issues of such securities. If this
remains In the bill when it is enacted
into law it will mean an almost
revolutionary change in the invest
ment market, for it will transfer an
important group of new securities
from the tax exempt to the taxable
class. Investment bankers are still
hopeful this class will be stricken
out of the bill before it's enactment.
In one department of the invest
ment market the continued Allied
successes has made for higher prices.
Bonds Of the Allied governments
rose again last week, touching new
high record levels. These issues are
now 10 to 20 points above the ex-
treme low prices of early in the year.
In no other group of securities has
the sudden and great change in the
fortunes of war brought such an i'm
provement. With the Germans
steadily approaching Paris in their
series of great thrusts begun in