New-York tribune., 1918-07-20

ne war news WHICH llaS SCiiiiu-
lated trading in stocks and caused
general advance of prices has not
disturbed the equanimity Of the
bond market, aside from the foreign
government and municipal issues,
which naturally are more sensitive
to news of this character. Railroad
and other corporate bonds have
moved very little and there has been
no pronounced increase in the vol
ume of sales. Apparently interest
has centred in speculative rather
than investment issues, though any
development pointing to victory
should react on bonds in much the
same way as on stocks, if in a less
spectacular manner. If the counter
offensive of the Allies should meet
with the great success hoped for, it
is probable that bonds would i'm
improve along with stocks. Mean
while, the quiet but steady absorp-
ton of bonds, in evidence for some
time past, continues. The buying of
this sort comes chiefly from invest
ors who are satisfied with the yields
now obtainable and who prefer to
buy at once rather than to defer
action on the chance that prices will
go still lower. They are getting
bonds at what ordinarily would be
considered bargain prices. One
house presents a list of fifteen rail-
road bonds, legal for savings banks
in New York, which at present prices
yield an average of 5.45 per cent.
A list of fifteen industrial bonds
shows an average return of 5.55 per
cent.
While the movement toward
greater economy is not so we'll de-
fined as it should be, reports from
various sources indicate that good
many people are less careless in
their expenditures than they were
a few months ago. The thrift cam
paign is at least partially successful
Yet there does not seem to be any
important shrinkage in trade. Wit
ness the latest statement Of Brad
streets on this subject: "Retail
trade" says this commercial agency,
''is quieter than for some weeks
past, but even at that loses nothing
in comparison with the volume Of
business doing at this date in other
years" 1t is obvious that such re-
ports as this--and it is supported
by similar reports from other agen-
cies, bankers and Reserve agents,
and by the undisputed fact that
large distributors find collections re-
markably easy-could not be made
if large majority of the people had
needed the governments appeals for
economy
What has happened apparently is
that while thousands have patriot
ically retrenched, other thousands
are spending as they never spent
before. This is especially true in
manufacturing centres, where labor
is fully employed at very high
wages. In such places the demand
for goods is big and insistent and
checked only by the inability of re-
tailers to obtain supplies. Those
who formerly bought most literally
of high-grade goods are buying
cheaper things and less of them, but
their places have been filled by
workers with swollen wages, who
buy freely and demand high-priced
goods--largely, perhaps, because
price is the only test of quality thcy
have. 1t is too much to expect that
such spenders can be persuaded to
materially restrict their purchases
merely by preaching thrift. The
orgy of spending must be stopped
in other ways. One effective method
Of accomplishing this result would
be the levying of heavy taxes on
consumption, such as Congress now
has under consideration.