The Bridgeport times and evening farmer., 1920-05-06
HENRY CLEWS'
 WEEKLY LETTER

Foreign political conditions con tinue, to take on an aspect which which tends to place the United States in a position of no little em- barrassment. We are neither mem bers of the concert of nations nor out side it, and the action of the Allied premiers in offering us duties and re- responsibilities which we are not in position to accept because of the fail ure of our Senate to take action on the treaty with Germany tends to tie our hands and to prevent us from as suming the place we ought otherwise to occupy in world politics It is growing increasingly evident, more over, that in the final adjustment with Germany we, have much to lose through our ambiguous position and nothing to gain. Our representatives at present can attend conferences of the foreign powers only as witnesses or advisers, but they have no au- thority to ask and obtain a share in the trade and financial adjustments which are necessarily being made as time goes on. Although there has been renewed rumor with reference to the possibilities of action on the treaty in the near future-the latest being a report that President Will son would send it back to the Senate there is no evident basis for any such statement, and even if the sug- gested plan should be resorted to it would still be as uncertain as ever whether he could obtain any action with the probabilities decidedly against it.
 Domestic Politics =.
 Domestic politics during the week have taken a turn that must be re- gretted by conservative observers in business circles since they have drift ed along the line of wild proposals for new taxes. The plan for sol diers' bonus, at first suggested as a measure of relief or compensation to ex-service men who needed it, has developed into what seems to be a i gigantic imitation scheme or an at tack on "wealth.'' The latter phase of the proposition has been seen in the recently introduced measure which proposes a tax of so per cent { on war profits, these being defined as ] the excess earned by an individual or corporation during certain specified war years above the 1914 earning. A certain minimum of exemption is, ot course, granted, but the purpose is to impose upon those of substantial income a tax of so per cent of the gains of recent years above their so- called EtnormaP' earnings The effect of such an enactment upon all values and investments was perceived as soon as the proposal was made pub-
 lie, and had a bad effect upon quota.
 tions, notwithstanding the positive
 assurance of Congressional leaders
 that nothing woud come Of the sug-
 a oE
 sion. Meantime the change in the
 plans of the Treasury with respect te
 the use of the sinking fund for the
 purchase of Liberty bonds has ha6 some tendency at least to weaken the price of those securities in the mar. ket. These factors coming in addi
 ton to the constantly advancing rate,
 of interest and the reports of prob able changes in discount rates at re
 serve banks have naturally given the
 impression of lack Of financial lead
 ership and of uncertainty in the man agement of conditions affected by na tiona1 policies.
 Banking and Finance
 l Nevertheless the underlying condi
 tions have continued to maintain
 themselves upon substantfa1r
 sound basis. The Federal reserv
 system, in spite of the continuousl-
 heavy demands upon it, has been abl
 to keep up it's reserve ratio to abou the figure that has prevailed in re cent weeks. Latest reports shove hat it still stands at 42 per cent 0
 only 9, fraction of 1 per cent off iron
 he week before, notwithstanding tha
 the needs of banks for discount ac commodation in the West and Soul
 haveS been assuming larger propor -=~-'s than ever before. Whatever ba there may have been for the con mt rumors of changes in rates the : have not materialized as yet, say l in some subordinate classes of paper S Rates for call during the early pa1 , of the week were maintained aroun II ' per cent while during the latter par t ] of the week 10 per cent rate wa reached. Time funds have not alter