New-York tribune., 1918-02-04

more or less unresponsive to current
news developments. 1t was impor-
tant because it tended to revive and
freshen confidence in securities which
had been tagging as a result of the
failure Of the recovery in December
to induce widespread public partici-
patton in dealings. There had been
a churning process going on in the
stock market throughout the greater
part of January, prices maintaining
an unmistakable tone of tirmness,
but failing to make any substantial
advance. During the period of back
ing and filling the market was
strengthened technically for the
movement that began on Thursday.
The advance had it's inception in
rush to cover by a large short in
terest, the movement gaining mo-
mentum, as traders who had short
contracts outstanding suddenly dis
covered that the floating supply of
stocks was surprisingly small, and
thereupon became eager to close up
their accounts. The vigorous and
impetuous character Of the advance
brought into the market a consider
able amount of investment and spec
ulative buying, indicating that there
are people who have faith in the
outlook for values despite the bur-
densome war taxes and the prospects
of another huge Liberty Loan offer
ing within the next month or two.
Peace talk received more attention in
Wall Street during the week; in
fact, one of the influences that start
ed the covering movement on Thurs
day was furnished by the reports of
unrest in Germany. Other factors
of Importance from the constructive
viewpoint were the action Of the
United States Steel Corporation di-
rectors in maintaining the dividends
on the common stock at the annual
rate of II per cent and the apparent
slow but steady improvement in the
railroad congestion problem. Rail
road stocks were helped somewhat by
an important decision of the Inter
state Commerce Commission affect
ing commodity rates on transconti-
mental shipments.
Coincident with the improvement
in the stock market railway and In
dustrial bonds displayed a better
tone, with majority Of leading in
vestment issues showing substantial
advances as a result of the week S
transactions. With the establishment
of higher prices for investment bonds
there occurred a moderate expansion
of activity, rejecting a broadening
in the demand for securities of this
character. Foreign government bonds
displayed a stronger tone as peace
reports became more insistent
United States Liberty Loan issues
made new low records early in the
week, but subsequently showed a
substantial recovery. The whole in
vestment market is still waiting for
the announcement of the details of
the third Liberty Loan Offering
which, it is expected, Secretary Nc
Adoo will bring out in the course of
the next few weeks. Some official
bearing on the interest rate and the
maturity Of the loan would be OK
tremely helpful in preparing the
market for the reception of the offer
ing. Meantime, corporate financing
operations on a small scale are tax
ing place from day to day. Last
week the Baltimore & Ohio Rail
road borrowed $8,000,000 for 81,
months notes on basis of about
per cent, while the Pennsylvania
Railroad and the Chicago & North
western were reported to have OBJ
tanned $5,000,OO0 each at about 5%
per cent. In the field Of state an(
municipal finance the total Of new
issues has fallen off sharply, onl,
SIS, 100000 being sold in the countr,
during January, the smallest amour
since the United States entered tn,
war. The marked reduction of sucl
borrowing is due to the tendency O
, borrowers to postpone all non-essen
tial projects in an effort to help tn
, government in the prosecution Of tn
war. Congress is now considerin,
/ Mr.. McAdoo's proposal for the gov
: ernment to organize a $50O,O0O,OO
finance corporation, the purpose O
which will be to take care of TIL
: financial needs Of private corpora
tons during the remainder Of tn
> war.
The money market continued un
= der the influence of United State
and foreign government financing
and such operations caused a rise t
i. nor cont in tho COLL loon ro%o A