The Bridgeport times and evening farmer., 1918-03-26
The World of Finance

inevitable widening of its power in
this respect; also a closer and more
effective coordination of the various
industries for the purpose of more
vigorous prosecution of the war. Be-
fore this war is ended there will be a
far deeper intrusion of government
into business affairs than the most
ardent socialist ever dared to believe
three short years ago; and; and in due
season the problem will be how to IN
scramble the huge and cumbersome
government machine which we have
created. The latest proposal is to
take over or lease the telephone and
telegraph lines; our government has
gone still deeper into the shipping
business by seizure of the 100000 tons
of Dutch ships; the War Finance cor
poration bill has passed, and that in
stitution will soon be affording much
needed financial relief; the President
has signed the Railway Control bill;
the War Board has authorized contin-
uance of present steel schedules an
other three months; no little uneasi-
ness is shown among textile manufac-
turers and cotton growers in regard
| to rumors of price fixing; there is also
more or less opposition to price fixing
of wheat, farmers naturally contend
ing that higher prices will stimulate
production, while the government
keeps an eye upon the political can
sequences of any further increase in
the cost of living. In the latter con-
nection a significant report of the
Department of Agriculture shows that
there are At millions more cattle,
sheep, swine and horses in the world
today than before the war. In the
United States the number of cattle
before the war. was Sc millions, now
about &c millions; sheep 49.7 millions
before the war, now 48.9 millions;
swine So millions before the war now
Ills millions; horses 20.9 millions be-
fore the war now 21.5 millions.
The effect of war upon our great in
dustrials has been very striking. At
first profits were immensely enhanc-
ed by heavy demands and high prices.
Gradually the latter extended to raw
materials and labor; then excessive
profits began to dwindle. Now come
heavy war taxes plus the surtax on
excess profits, which, will materially
affect the results Of future profits.
Nearly all our leading industrials are
reporting large gains in earnings; but
net results are not proportionately as
large, and in only few cases are the
results of the new taxes apparent,
because in many cases this years pay
ments are being met out of surplus
profits in prewar years A list of 72
| annual reports Of leading industrials
shows average earnings of $25.49 up
on common stock, compared with
| $26.2S a year ago. These declines
will probably become more pronounc-
ed during the next few months. The
railroad situation is unchanged, ex-
cept that uncertainty has been ended
| by the President affixing his sigma
ture TO the War Control Bill.
Adjustment Of the money market
to war conditions continues to largely
occupy attention of both government
and private financiers. The effect on
new enterprises Is marked. Under the
new law no enterprise of Importance
can be launched or financed without
official sanction. The government for
some time past has been discouraging
new capital applications as far as pos
sible, and now that the new War Cor
poration law has passed, the Admin
istration's power in this respect will
be even more effective. The problem
of meeting coming maturities is an
important one and will, no doubt, be
solved. The New Haven notes and
the B. R. T. notes are already await
ing adjustment. The new War FL
nance Corporation, through it's great
concentration of banking power, will
undoubtedly be a very important aid
in meeting the present situation, and
should assist materially in the neces-
sary expansion of credit without fos-
jtering undue initiation. According to
recent reports the governments finan-
ciaI requirements have been so gen.
erously provided for by previous
bond issues that, in view of the large
amount soon to be available from the
Income tax, the next bond issue may
prove smaller than expected, Govern
ment expenditures having been con-
siderably below early calculations. II
consequence of this fact, also thai
large subscriptions to the next Liberty
Loan have been partly provided fol
by subscriptions to Treasury notes, i
would appear that the coming LOAF
campaign, which begin in April, will
} be an easier and more successful un
dertaking tina any of its predecessors
Next to news from the front tn,
most potent factor in security move
ments is the forthcoming loan and tn
money market. The scarcity of tim
money, which may continue until af
ter the next loan is floated, is still
more pronounced than desired b
either business or financial circles
The stock market is, however, S
thoroughly liquidated that the effect
= of such stringency are not very OBJ
servable. Regarding security values
= there is a general undertone of Don
: fidence, especially in railroads who's
e outlook is regarded as much more Sc
cure under government control Will
the war lasts. The industrials are ais
well held, although increasing eXpens
\ es and taxes cause more discrimina
ton among purchasers. The securit
8 market as a whole is additional
strengthened by the fact that durin
the war the supply of new issues wi
be much restricted, and that outsid
of war loans there will be little opor
: tunity for investment except in stan
dard issues, which though low i
price are often scarce and prone t
: advance with any increase of de
i mand. Home conditions and techn!
!. cal position certainly favor the stoc
q market; but its immediate. course wi
inevitably be largely influenced b
events on the western front and at a
Washington.
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II a ATTED