New-York tribune., 1918-06-03
WALL STREET OFFICE:
Mills Building, Is Broad St.

SpeCulaCOrS tnaC CerrlCOrlal gains
made by the Germans at the present
time constitute merely a temporary
advantage, and will be overcome
when final victory over the Germans
is accomplished by the combined AL
lied armies. Of course, there is dis
appointment over the possibility that
present German successes mean q
much longer war than had been ex-
pected, yet there is no doubt but
that the financial community is
unanimously in favor of seeing the
thing through to the end, whether it
takes one year or five years more.
1t is an interesting commentary
on the Wall Street point of view that
the security markets are more di
rectly concerned over the prospects
of larger tax levies than the war
situation. That actually seems to
be the case. The reason is simple
enough. There is supreme confidence
that the Allies will ultimately de-
feat the Germans, despite present
disappointments. But in the mean
time the domestic problem of rails
ing larger revenues to finance the
war is before Congress-, and it is
quite evident that new schedule Of
income and excess profits taxes must
be prepared which is certain to bring
about a readjustment of market
values of securities. Industrial COM
ranies will probably have to bear the
largest burden of the increased
taxes; hence the shares of those
concerns are feeling the effects of
the uncertainty already in a hesi-
tating and irregular price move
ment. Last week the common stock
of the United States Steel Corpora
ton was under some pressure at
times, while other industrial issues
displayed unsettlement. Railroad
shares, on the other hand, have
shown frmness in the prospect Of
largely increased revenue from the
new schedule of freight and passen-
ger rates announced by Director
General McAdoo, to become effective
June 10. One Of the most favorable
features of the general situation, of
course, is the exceptionally brilliant
crop prospect, and the country has
rarely entered the month of June
with the outlook for abundant har-
vests of all kinds quite so favorable
as it is to-day. The Importance of
good crops is never fully realized,
however, excepting when the coun-
try has an off-season.
Somewhat quieter conditions have
prevailed in the bond market dur
ing the last week and the price
tendency has been toward increas-
ing irregularity. The demand for
certain classes Of securities has
been we'll maintained, however, one
of the most interesting and signifi-
cant developments being the steady
absorption of the new per cent
Farm Loan bonds which are being
sold by a syndicate Of banks. To
date approximately $50,000,0O0 of
these bonds have been distributed
throughout the country, and the de-
mand is still heavy. These bonds
have been placed in large numbers
with people who desired a tax-ex-
empt bond for investment. Buying
of Liberty Loan 31as has also con-
tinued on an active scale, owing to
the attractiveness of this issue be-
cause Of it's tax-exempt feature. The
strength Of the Liberty 314s has
been in strong contrast to the other
issues, which have fallen to new low
records. Municipal bonds continue
in good demand, while there is a
fair inquiry for the better grade of
railroad bonds. The bond market,
like the other security markets, is
likely from now on until after July
! to feel the effects of the heavy
demands to be made upon the money
market.
Money rates have undergone little
or no change during the last week.
At the Stock Exchange the rate for
call loans has ranged between S and
6 per cent most of the time, with
the supply sufficient to meet the de-
mands of the situation without ne
cessitating the interference of the
bankers money committee. Between
now and June Is the money market
will be subjected to the rressura 10