The sun., 1918-09-09
OPTIMISM IN SECURITY
MARKET SEEMS JUSTIFIED
Expert Reviews Last Weeks Rise in Prices-Says
Only Restriction on Loans Prevented
Big Bull Market.
ny WILLIAM JUsTUs BoIEs,

Wall Street would have a full fledged
bull market on its hands to-dayehad not
the money pool committee last weok
wisely given notice that the New York
barxs would NJ. finance such venture.
The markets enthusiasm was difficult
to hold in check, as the continued sue
ceases of the allied forcea together
with the important buying OF American
securities by traders in Amsterdam and
other foreign markets created the most
favorable situation that has arisen for
starting bull campaign since the
United States Joined tho list Of belliger-
ent nations seventeen months ago. As It
was the stock market showed q suffi-
clently strong undertons TO advance the
average price OF forty or nifty represen-
tative stocks to much the highest level
OF the year.
The sharp reaction which followed this
advance was due to the announcement
that Gov. Strong of the New York Fed
eral Reserve Bank had asked the Stock
Exchange authorities to furnish daily
reports to the money pool committee COW
ering the amounts borrowed each day
on call and on time by brokerage firms.
Following tho warning issued last week
by the same committee against any at
tempt to start a bull ca.npaign at this
| time, this further move was taken to
mean that all hope of securing accommo-
a 20 a,a ,faxt
during the period OF heavy war financing
must be abandoned.
Investment Buying.
But the really noteworthy develop
ment Of the last few days and one which
the bankers at no time discouraged was
the revival OF genuine investment buy
Ing. This was reflected in tho outright
purchase OF seasoned dividend stocks and
high grade bonds by that shrcwdest OF
all buyers, the little investor. He comes
into the market when he feels like It and
cause they are cheap, II he believes they
will be cheaper.
But he acts on generally good news
and although his operations are small
he often displays better Judgment thar
the larger buyer. whose resources arc sc
great as to expose him to the thousand
or more influences to which the very rich
man Is often subjected.
The overshadowing factor. however
was the publication of the new revenu,
bill which Is to touch tho pocketbook o.
every man. woman and child in tn,
country. Tho bill Is 90 full Of incon
gruities that It Is certain to DO picked te
pieces in the Senate, where dt IL likel,
to be changed in important particulars
Everybody expects to pay the larges
taxes that he has ever paid and ever,
corporation management-which repro
sents hundreds of Individual eharehold
than It provided last year. These de
mands are inevitable. for II war expenses
and loans to the Allies footed UP the rec
ord sum Of s1.S05.513.ooo last month
the chances are that this total soon will
be exceeded, as the expense ratio Of In
tensive fighting Is constantly increasing
But until the country knows Just wha
the actual burdens of this terrific ia.
law will be, business will be more or les
at a standstill.
Surplus Funds.
A saving feature Is that many corpo
rations, as we'll as many individual,
probably will set aside a greater sur
than will be actually required to NEE
these heroic Government demands
. These funds should be invested in the
per cent. Treasury certificates of in
debtedness which are available in dc
nominations as low as $500, and whic
will be accepted in payment for taxes.
! These certificates will be OF grea
, service in financing the heavy tax pay
, ments, for no such sum as $4,000, 600. 90
could be withdrawn from the banks g
one time without crippliAg the none
market. The Treasury has Just made
special issue Of these certificates date
. August 20, and since they carry as hig
an interest rate as the savings bank
pay, they ought to be quickly absorbe
by the public.
, Notwithstanding tho broadening Dc
. mand for money from mercantile an
, corporation borrowers. the Federal RI
serye Board does not contemplate rails
ing discount rates at this time. To do &
, would interfere seriously with the Coy
|. eminent financing and in the Judgmer
of Gov. Harding of the Federal Reserv
Board a drastic advance in discour
rates would not reduce the requirement
; of Industrial concerns engaged on va
:, work, but would only impose new bul
dens upon the people.
; The Governor In the course OF his az
dress before the Ohio Bankers Associt
, ton in Columbus last week took %
casion to answer those critics who cor
tended that the reserve banks ought
increase discount rates forthwith. sine
the present demand for money 1ustife
higher quotations
ImperillinE Government Finar
cling.
!. Those who urge this action. howeve
/, take a narrow view of the situation, Il
5 any general advance In discount rate
y at this time might imperil the success (
I the whole scheme Of Government finai
0 cling This Is a war market and II
imperative not only that the fourt
< Liberty Loan should succeed, but thu
S the fifth, sixth, seventh and other Ill
= erty loans, II required. should be hearth
o supported by the people.
: Any sharp rise in interest rates wou
- lead to a further advance In the cost
y living and impose serious burdens upe
= a people who already are having to bel
- "a prodigious amount of extra expens
a For the Government. therefore. to Il
S crease this burden needlessly would
3 shortsighted to say the least since Il
. situation can be better controlled by r