The sun., 1918-07-29
CONFLICTING FACTORS INFLUENCING THE IN.
VESTMENT MARKETS.
Effect Week of Startling War Developments
Future of Money Rates. Attitude of Investors and the
Prevalent Note of Cautious Optimism
BY WILLIAM JUsTUs BoIEs.

period of money strain has passed
with the financing of the third Lib
erty Loans 80 per cent. instalmen,
and the important corporation obi.
cations which have to be provided for
at this season. Inasmuch as money
rates have direct bearing upon specu.
lation, since a fairly liberal supply OF
call funds must be available in order
to finance any general upbddIng Of
security prices, the effort OF profes.
sional traders to stir the stock mar.
ket into action would be much les,
costly with call loans obtainable at 4
per cent. as compared with per
cent. The sale last week of $4,000.
900 New York city revenue bills on
an investment basis Of slightly less
than Az per cent, as against Az per
cent. obtained at the previous sale last
March. showed that the largest bank
ing institutions in the city were will
ing TO lend heavily to this municipal.
ity at terms only fractionally above
those paid by the Federal Government
for temporary accommodation. This
does not necessarily mean, however,
that the markets have entered upon a
period OF low rates for stock exchange
loans. But 1t does show that the ait
uation is not as tense as II was and
that the time Is not far distant when
genuinely easier conditions may pre-
vail.
Fourth Liberty Loan.
Everything points to a ready re-
fering of war bonds. the preliminary
details of which have been discussed
by the experts in charge OF the last
canvass. While the forthcoming loan
Is likely to be a record breaker the
probability is that Il will be very
largely paid for in advance, through
the sales to the banks Of Treasury
certificates OF Indebtedness aggreca'-
ing almost as much as the loan. Much
may happen before the house TO house
canvass for the new loan is attempted.
But inasmuCh as the sale will take
place at just about the time that the
farming communities IRE receiving the
proceeds of the most valuable crops
ever harvested the indications are
that there will not be much greater
difficulty in marketing the s6,000,00o-
900 issue than was experienced in
placing loan Of half that size few
months ago. USred States Govern
ment bond has come to be a household
possession, even in sparsely settled
communities. And since the forth
coming issue Is to be even more widely
advertised the expectation Is that Il
will attract at least 10000 900 buyers,
which would mean virtually A bond
sold TO every one in five Of the popu-
lation. At the last sale the bonds
were sold to one in every six and a
half OF the population. feat which
had never been achieved previously
by any Government.
The Outlook.
Enough has happened within the
last fortnight to indicate that the com
ing Ave months will witness extraor-
binary financial developments in con
nection with the world war and the
complications that have resulted from
it. The splendid achievements Of the
allied forces have brought cheer 70
the markets and strengthened the In
vestment outlook The average Amer
lean is keeping calm. however IN tho
effort to appraise these victories al
their real worth, not forgetting a. a.
the seriousness OF the situation owing
to the uncertainty OF warfare and tho
unsurpassed resourcefulness OF III"
German military machine. II is no.
surprising, however. that the markets
are rejecting a cautious Optimism
which has genuine basis In the str'h-
ing developments OF the last few dn's.
Arrangements by the Governne'
10 introduce the new system OF le.,r
distribution 80 az to insure an ale
quate working force for the essen
industries may be expected TO end rr
evils incident TO competitive bidd0g
by rival employ. This has caN-'i
much of the unrest from which '
country is suffering. for the nj
ment has been widespread under
stimulus Of a constantly deCrea -.1S
supply of workers to do an unpre'.
denied amount OF work. If the exiog.-
ment succeeds the reform will be -
much benefit to all Industries, for
methods Of labor distribution have boon
unscientif,c and calculated 10 c. sSe
trouble at the moment when It Is ts-
sential to increase output and mar
tain the industrial machine at a 'S7
state of efficiency.