The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-17
DOMINION MARKET
CONTINUES STRONG
Tar Free Feature of War
Bonds Explains Record
Prices Set.
DULL TENDENCIES SEEN
Stock Sales in New York Are
Governing Transactions to
Great Degree.
DULL TENDENCIES SEEN
spec,or co,re,posdenc. TO tn. Sun.


MONTREAL, June 1e.-In a financial
way the most interesting feature OF the
Canadian situation at the moment IL the
continued strength Of the investment
market New high record prices for the
Dominion's war bonds in the last week
! increase in the income taxes. The bonds
are tax free, and whatever indifference
the big investor might display toward
other securities he could not afford to
overlook these.
But concurrently with the renewed
strength Of these Victories steady alb
sorption Of new issues of provincial,
municipal and Industrial bonds is pro-
ceeding with no indication that the pub
lies appetite has become dulled. In
dustrial issues for the financing of plant
extensions in basic industries such as
pulp and paper have become the new
feature Of the bond market in the last
month or so. While the war lasted in
dustrial Rotations of any Importance in
any one year could be counted on the
fingers of one hand. The Government
had first call on the money market for
one thing. and for another security
houses and investors were unwilling to
take on new commitments In the indus
trial field with the shadow of war over
the situation. This attitude has been
steadily in process Of revision since the
armistice. and since the early spring
there has been a steady succession Of
new offerings Of Industrial bonds at in
terest returns SO high in comparison
with the normal rate before the war that
the public has responded freely.
In he net fIA fn0
Corporation announced that subscription
lists for an offering of 100000 Mat
tafamai Pulp and Paper per cent de-
benture stock had closed some days In
advance of the time hxed. An issue c.
$4,000 s per cent. bonds of Howard
Smith Paper Mills was oversubscribed,
according to a statement from the under
writer's. The purchase Of $5,500.0o0
81 per cent. bonds OF the Saguenay
Pulp and Paper Company by Quebec
Montreal syndicate was another an
nouncement OF the week. while arrange
ments are under way for a public offer
ing of bonds of a new tire company.
organized by mes-Holden-McCread
Ltd, the largest manufacturer OF boots
and shoes In Canada.
Some interesting influences are at
work in the market for new issues OF
this description. The advance in the
Dominion's war loans to large premiums
has reduced the yield on those securi-
ties to less than 5 per cent The in
weston Of moderate means is plainly
showing a disposition to take the profit
offered on the war bonds by selling out
to wealthy individuals and institutions
and to replace his investment with the
new Industrial securities at prices to
yield him from 6h to IN per cent
Swapping OF Investments.
This swapping Of investments accord
i ing to the bearing that the income tax
has on individual incomes may be ex-
pected to continue indefinitely. To the
very wealthy individual a price Of say
10 for 1887 51h per cent tax free
war bond, for instance. could well be re-
garded as low in comparison with the
yield offered on an Industrial bond re-
| turning nominally IA per cent, but af-
ter taxes less than half Of that.
! Conversely. the individual of small or
moderate means has a varying scale at
| which he will consider It profitable to
| sell out his war bonds. or some of them,
and buy into the high yielding corpora
ton issues. High cost of living, with
| its depressing effect on income based
on investments made before and during
the war. tends to stimulate this ten
dency.
Although a number of new higt
records were established in last week.
trading on the Montreal Stock Exchange
the market was inclined to dulness
with the tendency mildly reactionary to
ward the end of the week. AS usual, thu
trend of market events at New York wa
the main influence on traders in Cana
dian stocks The strike news from
Winnipeg. while OF a mixed order. de
veloped nothing sufficiently fresh t.
furnish an incentive to either the buyini
or the selling of stocks. General trad
| news continued satisfactory, and tn
strength Of investment issues such as tn
Dominion's war bonds was considered o
favorable import to holders of specula
tive stock.
But the market was disposed to la.
more importance on the course of stool
prices at New York than on purely do
mestio developments. When the stee
stocks displayed strength In New Yorl
In midweek vigorous buying of Stee
Company of Canada set in, ADVANCING
the price a couple Of points to its hes
\ quotation OF the year, while Dominion
Iron enjoyed fair rally. Specialties o
various ella ssihcation. notably Dominion
Glass and the Spanish River Pape
stocks, moved forward into new higl
ground for the year Stocks that are re
garded as standard issues in the indus
| trial list moved irregularly, Bell Tele
| phone recovering sharply to 119, or NOR
than above its low quotation OF tn
week preceding, while Dominion Textile
! allowing for the ex dividend factor, fel
back about as much.
Dear money and the liquidation of Of
and motor specialties In the New Yorl
| market, with reactionary tendencies II
the steels. checked the upward trend o
the Canadian list as whole before tn
close Of the week, and the market turne'
| dull and easier. There was little EVIL
| dence of selling pressure of an importan
| sort either for short or for long account
| but new commitments were entered int
| with more caution, and profit taking b!
| nervous bulls was sufficient to brlnl
| about moderate declines all through tn
| list.
! The conspicuously strong features o
the weeks trading were the Dominion
war loans, all OF which sold at new higl
, record prices. The 1898 Victories, whicl
were offered for subscription at par ant
4 interest last November to yield the evel
5E per cent coupon rate, sold up t
1861, at which price the yield is abou
/ 4s2 per cent. All the bonds are ncy
definitely established on a lower thai
per cent. basis, fact of consider
/ able Importance to the Government Il
| its plans for a new loan In the autumn
Loan Terms Uncertain.