The Bridgeport times and evening farmer., 1918-03-11
The World of Finance

oioc"S't04S O1 ufofe than three years or the f1ercest conflict the world had ever seen. Throughout the world the United States will be known and re spected far in excess of any previous possibility.
 Such a view hardly can fail to con st1tute a factor which will mean greater ultimate value for securities of corporations responsible for so large a measure of our national ac- ft1Fities. But this view is a long range one. Immediate market move nents will be subject to factors whose influence is closer. Early in April the third war lean will be offered for mally by Secretary McAdoo. Its exact terms have not been announced off, lclaIIy, but there seems no reason to doubt that the rate will be 1-2 per cent. In the meantime s, ,0O0, ,000, ,0OO of Treasury certificates of indebtedness issued in anticipation of the loan, will nave been periodically taken by the banks of the country on the Secre- tary's invitation. These are intended to be turned in in payment of sub- scrtptions to the new war loan. and there can be no doubt that the loan. like the ones preceding, will be a sue cess There is not unlikely to be some degree of preliminary Iiuuida- tion of fixed investments by interests who will wish to subscribe to such an attractive investment as a 1-2 per cent. United States Government bond. Subscriptions by means of funds thus released are not as desirable as more liquid capital. There must be buyers ou tho sold, and the volume of new capital is in this way not increased. The nat ural tendency of such sales of Stock Exchange securities is to depress prices. On the other hand there is usually a substantial degree of ex- pansion accompanying war. In war times there are so many opportuni- ties for large profits at time when speed and volume of production, whether on the farm, in the factory or from the mine, are more important than cost. Money in such times is rapidly accumulated and seeks invest ment.
 Securities of railroad and equipment companies have continued firm. The Conference Committee of the Senate and House of Representatives have reached a compromise on the disputed point whether the maximum time al- lowed after the formal declaration of peace Tor the control of our railroads to revert to the stockholders shOuld be IS months or two years. The con-
 mittee compromised on 21 months. Tn , the meantime not revenues, as pre- viHlSly explained in these adv1ces, are to be guaranteed upon the average of those of the three years immediately preceding the war. Thus railroad
 stockholders until the expiration of government control, regardless of in
 creased labor costs and costs of everything else connected with the . transportation industry, need concern! I themselves only with the condition in : which their property will finally be , returned Some indirect benefits also . suggest themselves in this direction, chiefly in the form of economies which l, can readily be undertaken under gov . ernmental auspices, but which would | have been impossible otherwise. These economies will it is understood, in v clude elimination of unnecessary high , salaried officials. Unprof1table ser , vices will be annulled; expensive , competition of fast trains will be dis , continued. Rate control of an arbi- ! trary character will permit advances sufficient to meet increased expendi-
 lures. In a word, advantage will be D taken of governmental control to cut
 off barnacles which may have devel-
 oped so gradually as not to be mo- f ticed. From this standpoint the rail roads pon return to their owners l T 111rpA @Soe- I than they are at present Beyond this = is the promise of the finances so nec-
 essary for new equipments, eXten- sions and improvements, the absence
 of which was a source of weakness of = long standing in railroad circles. The S Adminisb ation's War Finance Cor IS poration bill has already passed the
 Senate. There is at this writing no - reason to believe that it will not be r. on the statute books in a short time. l. Industrial corporations have not yet
 been given the same direct support by
 the administration as has been ac- - corded to the railroads. Prices o1 ) their products have been fixed by of l, I6cial decree at figures which are sup posed to take cogrizance of the war 4 time conditions under which the var io1is industries are operating. There - has, however, been no movement tc
 guarantee net revenues However :. the annual reports which are beine published day by day indicate ia lu vorabIe situation. It should be em' q. phasized that the reports in numerous
 instances fail to make specific reser
 vation for excess profits taxes ant
 other war imposts. Combined figures o@ of 63 industrial corporations whic1
 have reported for 1917 show 29.92 pc cent. earned on the common stock
 compared with 31.3S in the banne
 year of 1916.
 T It appears reasonable to assum
 that the immediate market situation :. will continue to be bound up with tn T. Ideveloprnents of the war.
 The stock market has the look O
 now being on a conservative invest s, ment buying basis favoring4 highe
 prices.