The New York herald., 1921-11-14
FINANCIAL NEWS
AND COMMENT
Armament Conference Ey-
pected to Be Greatest Stock
Market Factor.
STEEL MILLS ARE BUSIER
Railroad Earnings Slightly
Over Interest Charges-Ger-
man Exchange Drops.
STEEL MILLS ARE BUSIER

! IT "oulo De surprising IT proceedings
| OF the Conference for the Limitation OF
Armament were not reflected In price
movements OF securities in the leading
world markets. At the beginning OF that
important meeting it is almost safe to
/ predict that during the next few weeks
the deliberations in Washington will!
/ supply the greatest single force to SEN
timent toward stocks, to which many
economic events are likely to be sub
ordinate. Stocks may be selected in
place OF bonds as the foremost medium
for registering recurring waves of pub
lie feeling, certain to come with the
presentation OF national opinions at the
conference. as 1t has been seen clearly
that bonds are being directed by fall
ing credit costs and thus are not such
free market agents as are shares.
The application which a general
| movement Tor reduced armaments would
have to security values is entirely OBJ
vious. The destruction OF billions OF
dollars of capital during the great war
brought with it tax burden, since the
armistice the most onerous factor IN
raising costs Of production and con-
sumption Of goods. That fact is suf-
ficientiy plain to the people OF ell coun-
tries. The hope OF lessened taxation for
military purposes-past and present
was, probably. tho outstanding force.
secondary to the humanitarian ASPECT OF
President Harding's CALL which brought
the nations together
If the United States found It possible
and practicable TO appropriate 5000. 600. :
900 instead of more than S40o, ,0O0, 900
for years expenditure on the navy. It
would require no elaborate statistics to
show that the taxpayer would be re-
iieved measurably.
Naval Taxes Would Go to Business.
That part of large incomes. and small
ones. too, which now are paid into the
Treasury by corporations and indlvid-
uals for naval advancement, would be
cut 90 per cent and more, and the com
posite sum would flow into the sea of
capital. aiding to expand production
In the peaceful arts and cheaper the
costs OF goods which many consumers
have been barred from in the last year
because Of high prices on one hand and
reduced incomes on the other.
! The stock market on this side OF the
water has indicated rather plainly of
late disposition to make the most of
I favorable events. Although It can hardly
/ be said that the conference mad a d.
rect application to price movements be-
fore It convened, still there has been
evident in market comment the impress
sion that everything which cheers sen
tincnt toward the future OF business is
seized by investors and by spectators.
The current facts of business and
trade by themselves are not enough to
sustain tho rise that began in August
in the fashion In which Il has been sus-
tanned. Steel mill operations have been
increased 80 to As per cent. OF capacity
throughout the country, but the improve
ment has been accompanied by general
lack OF satisfactory profits. The ship
ping industry has not begun to make
money because commerce remains de-
cidedly light and operating costs are
excessive. Railroads, as whole, are
earning little more than their interest
charges and, to make bare margin
over their necessary income, upkeep has
been cut to the bone. Tho petroleum
industry stands practically alone Eek
Guiding the textile trade. which passed
the depths OF depression several months
ago). in beginning to disclose genuine
signs Of expansion on a large scale but
the exact meaning Of rising prices is not
yet explaineble.