New-York tribune., 1920-05-17

in many parts of the country. In the
steel industry alone 1t is estimated that
upward Of million tons of untitled
steel products are held up by the
freight blockade.
With such a setting 1t is not to be ex.
pected that the speculative security mar
ket will do much in constructive way.
Whether stocks have discounted by their
fall in recent weeks the effects of cur
rent developments upon business gen.
orally is yet to be seen. Certainly, one
can hardly look for important opera
tions on the upward side of the market
until the outlook Is more promising.
The best thing that could happen would
be continuance Of a narrow trading
market. Just last week in Wall Street
was about the dullest Of the year so far
as stocks were concerned. Prices drifted
lower most Of the week, but the move
ment was not pronounced. It was q
market dominated by the professional
traders who were mainly committed as
the bear side. Indeed, if one were to
eliminate the professional element from
the market there would not have been
much left. The public was hardly a
factor. To most observers the market
position appeared quite we'll liquidated
at the end of the week, and the existence
Of large short interest suggested the
possibility of an early rally.
The position of the investment market
is well described by leading banker
thus: "The investor is the only con-
sumer who is getting more for his dol
lar than he ever got before The man
with money to invest Is to-day the most
fortunate Of buyers, for he can assure
himself of high income return for the
rest Of his life under circumstances of
absolute security. This is because the
whole world Is short Of capital and is
bidding eagerly for the American sur
plus. Seasoned securities Of the tried
and true type are selling at price basis
which discloses an extraordinary in
come return
Again bankers tested the absorptiyc
capacity of the investment market dur
ing the last week, and found once more
q demand for high-grade issues at 7
per cent or better rate. Although new
offerings in which the element of risk
is extremely small are being quickly
taken by investors, bond men report
almost condition Of stagnation in the
demand for outstanding, seasoned bonds.
many of which are selling on a higher
yield basis than the new offerings. Many
disparitles in market prices exist in the
bond market, and this is attributed in
part to the fact that so-called unsophis-
ticated small investors are the main
buyers. For persons with annual in
comes in excess of $4,000, 5h per
cent tax exempt security yields more
under existing imposts than per cent
taxable bond. The small investor, re-
inforced by some institutional buying,
has absorbed most of the $43 100000 Of
new railroad obligations placed on the
market last week, and Of the $500, 0,000,-
900 Of railroad notes, bonds and equip
ment certificates created since the first
of the year.
The stream Of new issues bearing the
name of railroads Of good credit stand
ing will continue to flow during the COM
ing week. Several operations are known
to be near fhlition. One railroad banker
predicts that the open market will take
$200,0o0,o00 Of equipment offerings of
the roads Of good credit before the end
Of the year, and urges that the purchase
Of an equal amount Of equipment by the
weaker roads be financed out Of the re-
volving fund created under the Esch-
Cummins act.
The Canadian government may float
$15,00o,0o0 Of ffteen-year bonds in this
market to take care Of part Of the
equipment needs Of the government
owned railroad lines in the Dominion.
Unlike the domestic railway equipment
issues which have recently been foated,
this proposed issue will not mature Sc
rally. but annual sinking fund pay
ments will bs made sufficient to create
sum in fifteen years large enough to
pay of the maturity William A Read
& Co. have been carrying on negotia-
tions with the Canadian government.
At present the demand for exempt 60.
curities seems to be contracting, and the
rate for accommodations progressively
rising. A state or municipality of high
credit would now have to offer between s
and 5h per cent to attract funds.
Some Improvement has been noted IN
the prospect for the winter wheat crop.
but, generally speaking, the outlook for
the seasons output of farm produce
leaves much to be desired. Farmers are
seriously handicapped by the lack of
help, and the backward season has
tended to reduce the acreage planted to
staple crops. Reports to "The Stand
ard Daily Tvade Sorv}coU r,ht,h H.