New-York tribune., 1918-05-25

1t required just five lines on the
news ticker to break stock prices
sharply in the last ten minutes of
trading yesterday. A Washington
dispatch stated that majority Lead
CIR Kitchin of the House announced
that he had received word from
Treasury official that Secretary Nc
Adoo has decided that it is impera-
tive that Congress enact new reve-
nue. bill at the present session" At
once there was a rush by profess
sional traders to sell stocks. Steel
common quickly dropped two points
and other active issues followed it's
lead After the market closed an
other report was received in effect
denying the earlier one, so it might
logically be assumed that traders
viii have an excuse this morning for
buying back the stocks they dumped
just before the close. 1t is absurd
that the market should fuctuate at
all on these reports, for whether they
are accurate or not they have abso-
lutely no effect upon values. Every
body now believes that taxes on 1918
incomes and profits will be substan-
TALLY increased. What difference does
il make whether the size of the addi-
tional imposts is determined in July
or December? The balance of profits
remaining for stockholders probably
will be neither more nor less because
Of the date on which the new imposts
are fixed. 1t is obvious, of course,
that the extent which taxes are in
creased will have very important
bearing on security prices, but stock
traders do not appear to be con-
cerned with such fundamental facts.
They sell stocks because it seems that
the taxes, which in any event would
not be payable for more than year,
may be decided upon at the present
session of Congress instead of the
one beginning in December. If any
thing early action in the matter
would be favorable, because the un-
certainty which now restricts market
activity would be partly cleared up.
Supplementing the recent state
ment of the Federal Reserve Board,
il. which banks were requested to re-
duce or eliminate loans for nom
essential purposes - among others,
loans for purchasing or carrying
stocks and bonds-the subcommittee
OH capital issues of the Federal Re-
serve Bank of Philadelphia has just
issued an appeal to the member
banks in it's district to apply drastic
restrictions to further expansion of
credits. 1t urges all banks and bust
ness men to read carefully the boards
message on this subject and to fol-
low the course outlined as closely as
possible, because only in that way
can sufficient credit be made avail
able for the essential businesses. "To
prosecute the war successfully" the
committee says, "necessitates the use
by the government of the nations
supply of credit, materials, labor and
transportation to a far greater ex-
tent than ever anticipated. While
admitting the tremendous resources
OF our country we must not lose sight
of the fact that there is a limit be-
yond which we cannot go. In many
lines of production the greater por-
ton Of the output is now needed
solely for war purposes and in 9TH
ers an extension of facilities will be
necessary.
"The requirements of the nation
must in all cases be placed before
the requirements of the individual if
we are to win the war; hence the
necessity for applying rigid check
upon further expansion of credit in
directions not clearly essential for
HE prosecution of the war or for the
heaSh and necessary comfort of the