The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1919-10-31

divisions of the market the movement
was accelerated as the week prog
ressed. A retrospect of the stock mar
ket since the beginning of the up
spring early in the year shows that
Is leading active stocks on the big
exchange have made advances varying
from IS to over $50 per cent. The
average advance from the early-year
low prices of these Is stocks is l56
per cent. This advance may be &C
counted for. by the following factors:
About one-third sof the upmove can
be attributed to the fact that the dis
location of the industrial market after
the end of the war caused widespread
pessimism. Hence the swing of the
market uendulum carried prices to an
extreme low point. A recovery of at
about 80 per cent from the lows
would have been justified in apy~event,
bringing prices back to normal, even
under the then existing conditions Of
uncertainty.
Another third of the improvement
may be reasonably attributed to the
high cost Of living, which carried the
prices Of commodities to new high
levels and enabled the big producing
industrial companies to roll up profits
at an unprecedented rate.
The other third is clearly due to cur
rency initiation. With billions of dol
lars in Liberty bonds in the hands of
the<public that are now being used
much the same as dollars in the bank
formerly were used, and with money
exerting purchasing power of only
50 per cent compared with the pre-
war period, it is not at all surprising
that this fact should be emphasized
in the stock market by lifting Of the
prices of securities. ia.si
1t appears to be current opinion
among the best posted and most
conservative authorities in the finan.
cial district that while the advances
which have thus far been registered
have been relatively large, they are
likely to go still farther. The import
ant factors that now enter into the cal
culation are: the enormous increased
earnings Of the leading industrial com
panies; the inability Of big holders of
stock to iquidate without paying to
the government a very large proper
ton of the profits in the shape of in
come tax, and the fact that because Of
the enormous profit taxes, the COM
panies themselves have not distributed
earnings. and do not. intend to dis
tribute earning in the near future, in
the shape of dividends in anything
like fair proportion.
The policy is to conserve earnings
and, instead of distributing cash divi-
dends, to declare dividends in stock
of no par value which will not be tax
able if. as is, expected, the supreme
court of the United States renders a
favorable decision in this matter in the
very near future. 1t is believed that
such a decision is imminent and that
when rendered it will be the signal
for the declaration of enormous stock
dividends by such leading companies
as General Motors, Crucible Steel,
Chandler Motor, Baldwin Locomotive,
Republic Iron & Steel, Atlantic, Gulf
and West Indies, Mexican Petroleum,
Texas. and many others which have
recently added to their popularity with
new investors.
New Foreign Credits.
Almost simultaneously with the cir
,ulation of the statement that no fur
.her credits would be sought here by
ne British authorities, comes the an
1ouncement that, through ]. p. Nor
gan 4 Co., a new loan of a quarter of
! billion dollars is to be placed in this
country on behalf of the British gov
,rnment The proceeds Of the new
oan are to be used in part for the
.etirement of the outstanding So per
cent British notes due November LIST
n the amount of $l35 600 900, and the
balance for the purpose of the British
government in this country and for
he creation of dollar exchange.
. The immediate effect of this new
;redit will be to relieve the pressure
ipon the exchange market that would
lave resulted from the payment of the
notes at maturity and to
provide additional exchange for the
market. This will provide new buying
,ower for Great Britain in the Ameri-
an markets, and, while only very
mall amount as compared with the
necessities of the hour, it is at least a
'eginning OF movement that in time
nay reach much larger proportions.
4 A credit OF SIS ,OO0, 600 based on gold
Ield on deposit In Siberia is now being
rranged in New York for the On1sk
SbSiuAHCHt. sACSCut reports from
iberia have credited the Kolchak gov
rnment with holding some $4OO, co., /,
W Of gold formerly owned by the
szar,st government. 1t was assumed
hat the gold to be used as security for
ne credit arranged in this country
you'd be drawn from that source. The
allure of the security relieves the
of the questions that 1
you'd arise in connection with the
xtension OF a credit based on the
romises of any government. Kol- ,
hak, according to reports, has been /
ndeavoring to arrange a loan in this !
ountry for several months, and it is !,
elieved that the fact that he has sue !
eeded has no significancerof poiiti4 ,
al character. = = : = -
Until almost week ago it. was as. |
umed, also, that American interna- $
lonal bankers would lead the move i
lent for the extension OF an addition t
S50OWOQQ credit In Relaiunn Tha I