The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-10-16
CANADA PREPARING
FOR VICTORY LOAN
Minimum Of $500, O00,0OO Re-
quired, but Is Expected to
Reach Half Billion.
BONDS TO YIELD 5 1-2 P. @.
Will Be Tax Exempt and Con-
vertible Into Future Is
sues Of Similar Nature.
specsai DespascA to Tns Sun.

Special DespafcA to TIE Sun.
TORONTO, Oct. 15.--with the pubiica-
ton OF the prospectus OF canada's Vic
tory Loan OF 1918 the FIELD work for the
ao,ation enters a more active phase. al
though the subscription lists will not
omen for two weeks yet Terms are
practically as expected and in we'll in
formed circles no doubts are entertained
as to the success Of the transaction.
subscriptions, It is thought, will easily
pass the $500, 100000 set by Sir Thomas
white as the minimum requirement. and
many expect to see them approach rea-
aonably close to the half billion dollar
mark, at which the loan organizers are
aiming. The effects OF the more favor
able military outlook overseas and OF
the rising hopes OF q speedy end of the
war are seen in the lower interest rate
offered to subscribers In case OF the
Victory Loan of 1917 the five year
bonds gave q yield Of 5.S1, the ten year
bonds a yield of Sos and the twenty
year bonds a yield OF SOL per cent
Both the FIVE year and fifteen year
bonds Of the loan of 1913 will yield but
Bb per cent.--the issue being made at
100 and interest.
As had been generally expected the
Intention regarding the tax exemption
feature, Notwithstanding the agitation
for taxable bonds--the new issue will be
entirely free from Dominion income tax
and thus will be on the same footing as
its predecessors The 1918 loan will be
convertible at issue price and interest
Into any future domestic issues OF like
maturity or longer. As regards CONVEX
sion of old loans into this one, that Ii not
likely to be much In evidence. The
greater part of the outstanding domestic
war loans OF Canada Is now represented
by the Victory Loan of 1917. which with
conversions amounts to $560,0o0.00o--
out Of a grand total of s750,000, 600.
This 1917 loan yields a better rate, so
there would be q loss in interest through
conversion. Again n large proportion
of the outstanding bonds are twenty
year bonds convertible only into new
bonds of twenty years or longer; and
the 1918 Victory Loan contains no Is
sues with maturity beyond fifteen years.
Last year there was very general
movement to convert old bonds into the
1917 loan.. .a...., ...7
Taxation Question.
In one respect the situation in Can
ada is more favorable for the flotation
Of a large domestic loan than that
which confronted the United States
when the Fourth Liberty Loan was
launched. 1t was generally recognized
that the new war revenue bill at WASH
ington, providing for sensational in
crease of taxation. would greatly i'm
pair the subscription capacity of those
classes OF investors which had sub
scribed very heavily to the preceding
loans. The new taxes which wealthy
Individuals and corporations are re-
CURED to shoulder will be payabl within
few months after the final instalment
OF the Liberty Loan natures. Thus the
taxpayers will be obliged to make pro-
vision for the imposts during the sub
scription period of the loan. In Can
ada the matter, OF new taxes will not
prove to be relatively as great diff
fculty, as there Is no drastic increase
Immediately in sight. Last spring when
the budget was presented the Canadian
income tax was increased-after the
Increase was made the Canadian tax
on incomes was approximately the same
as the existing income tax in the
United States. This enlarged tax. which
Is considerably less than that provided
FOR in the new American war revenue
bin. is payable in June or July, 1919
Also the Canadian excess profits tax. as
same as in tho preceding year. SO the
potential loan subscribers in the Domin-
Ion will he In a better position to sup
port the Victory issue in that their war
taxes as yet are lighter than those In
prospect for American investors.
OF course, It is recognized that Can
ada will be obliged to increase her taxa
ton, perhaps drastically. to carry the
great war burden. but such Increase IL
not in prospect for this month or next
month, and it thus does not count to
any material extent In retarding the
fotation OF the new Victory Loan Per-
baps when the taxes are inaugurated
the war situation may be such as to
warrant the belief that another large
domestic loan will not be required.
stock Markets Active.
Notwithstanding the preparations fol-
the war loan and the discouraging att
tude of bankers toward brokers' loans
& some activity continues to prevail In the
Montreal and Toronto stock markets
This has been stimulated and kept goinf
by the dividend increases and bonus
distributions announced from time K
time by various Industrial corporations
Also the continuous good news comine
from Europe in regard TO the war stu
alton inspires the speculative elemen
with the desire to purchase stocks II
anticipation OF a peace boom. Appar
entity those desiring to do so contriv'
70 secure the money or credits neces
gary to finance the purchases. With th'
Victory Loan 80 near at hand II II
likely, however. that trading in stocks
b. common consent, will be almost sus
pended
Apart from the Industrial stocks re
Earded as promising peace investments
considerable interest has been mani
Tested In Canadian Pacific. The genera
confidence OF Canadians In c. p. r
stock is not shaken by the unfavorabl'
earnings The August net, at SO. 900
Is the lowest 20 far recorded this year
and the net earnings for eight month";
TO August 81, at S20,0s5 900, are lowe
than shown for this period since 1915
However. an Improvement Is expected
In this month az the delayed crop move
ment Of 1918 attning its full swing. II
September the g-oss increase was les
than 10 per cent. higher. notwithstand
ING rates are over 80 per cent. higher
This indicates q much lighter volume o
Uaiae. As peace proposition. takei
), Tor term OF years. Canadian Pacift
mas attractions II Ia believed that tn
naturalization agitation Is nxziing. an,
me company will likely be left to con
ouet Its operations Independently unde
The present able management
ouotations Unchanged.
Ola metals and sugar quotations wer