New-York tribune., 1918-09-25

the bulk Of the buying Of stocks Of
late has been for investment ac-
count the market must be in y re-
markably strong position, for it is
4 fact that the floating supply Of
stocks has been scant for many
months, and further depletion must
| have brought about situation that
! would be almost acute were the de-
mand OF large proportions. AS long
MS existing restraints on speculation
are continued, however, the chances
are that we shall have ar inactive
and sluggish market, though posi-
bly, with prices showing q definite
trend. At any rate it is fortunate
that the market should be in such
4 strong position, for we arc on the
eve of the greatest financial trans
action in history, and it is not i'm
possible that before the campaign is
closed there will be considerable
liquidation Of corporate securities
by those who desire to place their
funds in fourth Liberty Loan bonds.
AS hes been pointed out in these
+ columns, the prospects are that the
railroad section Of the market will
practically "dry up" after the con-
tracts have been signed, for these
shares will then be, for the balance
of the period of Federal control, on
substantially the same basis as
bonds, inasmuch as earnings will be
! definitely fixed. Consequently there
will be little room for speculation
i'll them on the basis of earnings.
AS for the future the outlook is
hazler. Francis H. Sisson put the
case concisely in an address deliv-
cred yesterday, when he said:
"The future value of railroad Sc
curities will not be determined even
during The period of government
| operation, and still less in the pc
riod of transition from government
back to private operation, by the
compensation which the government
may pay the companies or by the
way in which it may maintain the
properties. AS the prospect of the
return Of the railways to their own
ers. as the act contemplates, becomes
more imminent, the ratio between
earnings and expenses will become
q more and more important factor
in determining the value of the
securities.
"From the short term viewpoint,
that of the period Of government
regulation, the position of the Sc
curity holder is fairly definite. He
has assured for him a definite guar
anteed return and need not be dis
turbed about the uncertainties that
might arise during this period. He
has thus been greatly served by gov
ernmental intervention
"However, it is clear that govern
ment operation will undoubtedly
make it very difficult for some roads
to have returned to them the same
kind Of railroad that they had be-
fore the government took over its
operation. Through the re-routing
of traffic and the common use of ter
minals the business that certain
reads had developed will be affected,
and they have insisted upon their
right to recover damages for such
losses in order to protect the inter
csts Of their security holders"
The president Of the American
Bankers Association is amazed be-
cause more money is being saved in
this country than ever before, while
business in general has not suffered
from measures of economy" There
S IS really nothing surprising about
this. The saving Of one class has
been balanced by the extravaganza
Of another, so that the result with re
gard to reducing the aggregate civil
ian consumption of goods has appar
emily been negligible. Inflated wages
in industrial centres and unprece
: dcnted prosperity in rural districts
particularly where crops have beer
bounteous, have made for wild ex
travagance. And as long as the
t goods wherewith to satisfy the de
sires of those who are making ex
travagant profits or drawing swoller
wages are provided, just so ions
a will there be a shortage of labor il
o the industries engaged in the pro
/ duction of the things required fol
war. The nation cannot maintain ;
normal standard of living while util
lzlng, say, two-iifths of the labor i,
the country for war purposes. Eth
) er the people must get down to :
tlrae II e. he ctncJo,.J ~,