Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-06-11

HIGH TAX ON SHORT SELLING
AND LARGER MONEY SUPPLY
ARE CONSIDERED MARKET AIDS
Scarcity Of Stock Supply Also Helps Strength in Opinion
of Prominent Broker-Tax Problem Interests
Many-Cossip of the Street

N"oHy OOoo u IN SHCCt
WHEN asked his reasons for the continued strength Of the market a
= prominent downtown broker remarked yesterday that a far $ he
could zee there are no factors to which the strength could be attributed
except IT be the high tax on short selling. and the increase in the volume
of money, combined with the scarcity Of the supply.
Another broker in the uptown district said the outlook at present
is the most reassurins the least confusing since this country entered the
war. The economic machinery of the nation has been modified o a war
basis and business is becoming more and more accustomed to nw condi
tons, and is o running with a rhythm and smoothness which not long
ago would have seemed incredible.
The mana ger of a large banking and investment onc.rn said ye.t.r.
day that if anything we're needed % prove the soundness of the securities
market the two events Of prime Importance which occurred were
certainly sufficient. He referred to the German drive and the submarine
raid each on opposite. sides Of the Atlantic. There as o rush to sell,
perfect equanimity prevailed in financial circles. From this condition he
deduced that stocks in general are strongly held.
Speaking about the effect If the tax tissue oil the market, n banker
said that the excess profits tax of last year a parallel with the greatest
wave, of imitation in currency this country ever has known, but that
England had exactly the same experience under exactly similar crcum-,
stances: Jus. a as the e a becomes law" he remarked, II
look for a bull market, IL We don't have it in the meantime. According
to my views" he continued, now is the buying time.
|r- On all sides this subject of taxation is the absorbing topic. and the
greatest hope is expressed that Congress will give more than usual care
in the levying II taxes so that capital will have no hesitation in assum-
ing the necessary risks which it assumes in normal times.
The only serious criticism of the secretarys plans is not in the
size OF the additional burden. as every n seems satisfied that it is
no larger than absolutely necessary to meet the occasion, but in relative
proportions of bonds and taxes by which it Is proposed to raise the
amount; 1t is more frequently admitted that s1-a per cent is toe much
of a immediate burden to be raised by taxation by the people who are
fighting the IA Others claim the percentage is lot any too much,
and that the country will nev be in a better condition to pay the
needed taxation than at present. They claim that it is impossible to
have a fixed standard of percentage in such cases for a longer period
than a year, and Is proof of their contention point to how the war bills
have continued to rise to enormou proportions within the past few
nVh'he' viii VIC po""N"' VI SoNe NN"e
the coming months.
1t is acknowledged that in assuming that nx years ar expendi-
lures will be double tho,. of 1918 Mr.. McAdoo is adopting the only
course, and that it h. taken a good deal of moral courage t o do So
as it is admitted that it is better by far to place the estimates too
high than to exhaust the revenue in the first eight r nine months.
Interest in Armour Bonds .. .-
There is quite a good deal of interest being shown in tn. forth.
coming issue of ssooooooo 8 per cen serial gold debenture bonds Of
Townsend, whelen & Coy Frazier & Co, and m other local houses
opinion says will be absorbed in short order.
s~ The notes are dated June 15, 1918, and are due seriany from june
Is, 1919 TO 1924 inclusive. ~ "'
- They are free from normal income "a of 2 per cent, and are con-
veruble at par into per cent cumulative preferred stock when issued.
These debentures will be a direct obligation Of Armour & Co. and
are issued to retire current obligations.
g@a The net earnings of the company for the fiscal veal ending October
81. ,ls7, yer more than ssl.oooooo after deduction of all taxes and
interest charges.
The bonds will be sold ats an averas to yield about 716 per cent
!. ogden Armour. president of Armour & Co, in connection with his
'companys forthcoming bond issue says: This will De a fTerunner
Of many transactions Of like or greater sze handled by Chicago bankers.
On them for working apital in phe Of The act that in h. at three
years from net earnings OF yer $520O000O more than S46,000O00 has
been retained and reinveNed in the business.
ut is my hope that a 8 many Is possible of purchasers of these
,debentures will convert into preferred stock; they will be welcome
partners and associates.
at has long been my wish that I could invite the public to par
tidpue in management and profits Of our business"
Reports of Business Vary
in the various bond and investment houses yesterday. Some Of the
concerns we're finding fault with the slowness of business in general.
while a few exceptions claimed to be unusually busy.
e. o.. non ,a 49, sav d.ns on CO.. =, ~. naum
$4,000 900 900 in taxes which must be paid to the Government this week,
M " nnn ~. &c 80. .hans shoud .houd !. 49,.
normal or better in the bond business. t
There ar said to be some very attractive issues in preparation
which should be ready for announcement within the next week or ten
for, Is some of the issues are said to incorporate a number Of the attrac--
tive features of the Armour issue mentioned elsewhere; that is,
It is possible to make them, to sy nothing of high income yield.
ts ="