The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-16

troll has been due largely to the assumo-
ton by the Federal authorities in man
aging the railroads of privileges which
they had declined to accord to the pri-
vate owners.
A Disturbing Proposal.
Neither the railroad nor any other
problem will ever be satisfactorily
solved by pigeonho!ing It for I'VE years
so as to avoid the issue at the time
when it ought to be faced couraseousiy
by a people who prize individual initia-
tive as they prize their right to live. 1t
is not surprising, therefore, that this un-
expected proposal by Mr.. McAdoo in the
course of his valedictory TO Congress
should have induced selling of the rail-
road shares at moment when the
stock market displayed signs OF distinct
armness. This was not because the
country was in immediate danger OF
accepting the pirector-Generais sugges-
ton but because the proposal added
another element OF uncertainty to a
situation which was heavily burdened
with the problems of reconstruction.
The country is not likely. therefore, TO
commit Its second largest industry to a
1--WE year experiment with the virtual
certainty that at the end OF that time
the confusion would be go great as TO
make Government ownership inevitaole
| The day before Nj. McAdoo made MS
extraordinary announcement the nrs'
| long term bond issue attempted since
.
bought out. The advance applications
! for the Sl0,50O,000 Chicago and North
western railroad per cent bonds Of
/ fered at par and interest were so grea'
| as to give the bankers heavy over
| bsci1ptlon almost as coon as the loaT
was announced This showed that th'
public was willing to put its money int'
| ong term bonds again when thoroughly
high grade loan was offered at price
sufficiently low to provide an attractiv'
investment Yield. The circumstances o
this sale resembled those surrounding
the famous offering Of the Pennsylvani;
Railroad $4,000, 600 loan in the thir'
week of April, 1905. The market wa
just recovering from the 1907 panic dis
turbance. during which one or two New
York city loans had been turned dow
by a public which was manifestlng
preference for the per cent. corpora
ton note issues ootainable around par
Turn in the Bond Market.
Intense interest was manifested in th
Pennsylvania foam Offering, therefore
which marked the turning point in tn
bond market OF that year. the loan beln
heavily oversubecribed in this countr
land in Europe. Those bonds were OF
fered on Az per cent. basis as agalns
a per cent income return provided b
the Chicago and Northwestern bon
issue OF last week. The question arises
therefore, does the instant SUCCESS c
the present Offering reflect the sort c
, turn In the bond market of 1919 as di
; the quick sale OF the Hennsylvan
! Railroad loan a decade ago? The prob
ability is that IL does unless the agita
ton Of Mr.. McAdoo's proposal for cor
tinuing the railroads under Governmer
control until 1924 occasions general III
settlement.
The bond market is much broade
under the impulse OF quickened d.
mand for seasoned securities of the tyI
n that are ordinarily sought by investor
Q following period OF serious disturb
}. ances. over the counter trading, a
. though not spectacular. nor of the vo
4 ume Witnessed in this month of sue
o years az 1909 Or 1904, Is suggestive
II real change in the public's attitude Il
9 ward long term security offerings. TT
= short term note, although stlll the mo
!. popular form OF investment, does NJ
d occupy the stage TO the exclusion
l. everything else. as II did few mont
= ago. The public for almost the first tin
Il since the European war began Is buylr
good bonds in both large and small siz,
" blocks.
This improved investment inquiry
preparing the ma rketS for the importal
:; financing which will have to be reckon,
i with as soon as the European countri
10 place large orders for American foo
u stuffs. merchandise and supplies The
y orders cannot be settled for through m
n tallic remittances, since the foreigne
. have not the gold 10 send, and unle
Y credit facilities are given them the NOV
N ment OF the foreign exchanges will
IS 30 heavily in favor Of this country as
At make It very costly for OUT Europe;
m customers TO deal with us In any lar
way The probability is. therefore. tn
Z. large foreign loans will have to be float
: here and that American investors W
be educated 10 take them In large bloci
Our investors now own $4,000. 900. 900
\, foreign Government securities besid
., $500, 900. 900 of notes, bonds and stoc
~ put out by foreign corporations. The
10 Is also to be considered, in dlscussl
NJ the position o: the foreign exchange ms
~ ket, the $3.50, 900 900 adva need FOR W
purposes by this Government to Its ALI
&c m. cooAs for Fareinu Secariti 4,