New-York tribune., 1918-10-11

tanned since the sudden surrender
Of Bulgaria made the prospects for
an earlier peace than had previously
been expected seem bright. Here is
what happened to the leading steel
issues since that time:
Loss since
Yesterdays Bulgarian
close. surrender.
esss'sss" essess stse. b. 81 $ 1711%@s
hackawanna '........... 1874 S'A
Republic Iron 8 Steel. .. sei4 9
L. =. Steel. 1Ob4R oFs
Whether the recovery which
started yesterday will continue can
not be foretold, but certainly the
action of the market indicated that
traders felt less gloomy as to the
peace prospects Of the steel shares.
1t is like this with the steel COM
panies, the shares Of which have
recently been declining under sell
ing induced by the theory that they
are "war" issues and must there
fore suffer heavily by the restora-
tion Of peace.
During the war period they have
been favorably affected chiefly by:
= /. A demand so enormous that pro-
duction long sustained at record
levels has never caught up with it.
9. Very high prices.
They have been unfavorably af-
fected chiefly by:
/. Rapidly advancing costs Of labor
and materials, resulting from short
ages, which have cut net profits
heavily since prices for steel prod
ucts we're fixed.
2. Heavy taxation of profits.
After the war they will be unfa-
vorably affected chiefly by:
I. Loss Of war business.
2. Probable decline in prices, with
wages falling less rapidly.
And favorably affected chiefly by:
l. Great demand for steel for re-
construction in Europe and for work
in this country that has been post
poned owing to- inadequate supplies
Of labor and materials.
2. Reduced taxation, or, if not that,
at least the practical certainty that
further increases will not be inn
posed.
8. Larger supply Of labor and bet
ter transportation facilities.
4. Large quick assets in the form
of cash, Liberty bonds and other Sc
curities.
S. Many new plants and much new
equipment, the cost of which has
been largely written off out Of profits
made in the war period.
1t is out of these facts that the
trader attempting to discount peace
must construct theory as to the
future of the steel shares. The task
is difficult, for one reason because
there are SO many factors in the
equation and no reliable formula
for solving it can be found until
it becomes possible to estimate will,
some degree of accuracy the post
war demand. Meanwhile, the mar
ket obviously is Of the opinion that
all steel issues are war issues. It
may be right. But it would not be
surprising if time should prove that
traders have made bad guess. 1t
should, in any event, always be re-
membered that the war issues have
never sold ON the basis Of war time
earnings.
One of the great banking insti-
tutions in this city yesterday re-
ported that subscriptions to the
fourth Liberty Loan entered by it's
customers, consisting Of large bust
ness concerns, were in many cases
smaller than subscriptions Of the
same firms and individuals to the
third loan, often less than half as
much. That is an amazing situation.
for if any section Of the commu-
nifty should understand the impor-
tance of subscribing at least twice
as much this time as last it is the
business world. The business man
is a soldier in the financial legion
and has no more right to hold back
than the soldier who is ordered to
attack the enemy. AS a patriot. he
should need no urging. But, aside
from the patriotic appeal, he should
consider what he has at stake.
There are only two methods of rails
ing funds for war One is through
the flotation of bonds; the other
through taxation. And it is certain
that if the loan should not be put
over, as the government has a right
to eXpect--if the banks have to
come to the rescue at the last mo-
ment-much heavier taxation will
follow What cannot be procured
on voluntary basis must be pro-