Evening star., 1922-10-29
BY I. A. FLEMING.

New York stock and bonds, largely
the result of the desire on the part
of traders and investors with good
profits in sight to transfer paper
profits to bank credits.
1t seemed as if this movement,
which has been anticipated for weeks.
was past due and that perhaps the
investment demand had been largely
cared for. as evident by the heavy
selling of bonds and the decline of
the new Treasury Ans considerably
below par This was also accom-
issues, causing not little surprise
as to the source of the selling.
The theory that the banks have
been unloading bonds is not accepted,
plus funds in these investments. Cor
porations heretofore large buyers
and holders of liberty issues are not
In the market as freely as they have
been. as they prefer issues with
greater return, the tax feature cut
ting less Importance than formerly,
as corporations have but one tax
rate-12 per cent on gross earnings.
A reason is readily found for the
decline in the new Treasury Ans. this
being probably due to the throwing
over of many bonds by parties who
sell again quickly at the premium
that was expected-the one-half
point advance that marked the first
sale when issued.
When prices have been going one
way for the better part of a year and
three months without a real reac-
ton. one should not have to seek an
excuse for the belated reaction:' 1t
was due. past due.
Whether 1t will go farther or not
it1 h.. ho oh O a
largely in favor of the profit taking
movement aided by bear pressure car
rying recessions still lower.
The feeling among operators In Sc
curities is that the reaction is more
than warranted through the belief
that the turn of the market for a
good cleaning up before the holiday
trade is past due.
There is nothing more to discount.
Every good thing has been literally
discounted, while the many unfavor-
able factors in the situation were not
discounted on their occurrence. even
if the removal of some of these fac
tors was the occasion for advancing
prices.
There are many things that indi-
cate an mprovement-larEe orders
for rail equipment, heavier loading of
ears. better retail business in some
sections and larger activity of in
dustrial corporations.
out tHSIt are SOillc lHlIlSS tfdl III e
not as pleasant to contemplate. The
bills are coming in for the losses sus-
tained in the local coal and railroad
strikes and they hurt-they cut down
railroad earnings materially and they
put some heretofore probable dividends
into the uncertain list.
Moreover. the loss OF millions in
wages has taken just that much away
from the buying power Of the communi
ties affected and this loss is likely to
be felt for many days.
Europe's buying power does not grow
betimes and that Is not the worst Of IT.
The passing years show small improve
ment in this respect.
The Elections.
While there seems to be little doubt
that the party in power will have a
good working majority in the next
House and Senate. conditions that may
cause some uneaSineSs. to put 1t mildly,
are developing.
Bonus promises tied up many repreeen-
tatives and some senators in the present
Congress-, against their own good judg-
ment, the only real satisfaction in the
matter to them being the fact that Mr..
q, Harding was waiting for the measure
with his ak.
Efforts are being made to pledge the
next Congress to many kinds of special
legislation not for the good of the coun-
try at large. but for specifis interests,
class legislation of the baldest type.
One questionnaire wants the repeal of
the Esch-Cummns railroad law another
the defeat of ship subsidy, anti-votes
against all attempts to regulate labor
or to restrict the right of labor to or
ganize and bargain, wants work against
federal judges issuing injunctions, and
is antagonstic TO the United States Su-
preme Court.
Then. of course, the blocS are aggres-
sive and the bonus legislation will crop
out again even before the new Congress
holds its first session.
All these things seem to Indicate I'M
easinesS despite the lessons of the year
in the two big strikes with their dis
astrous effects.
Congress will come back next month
to consider ship subsidy and anything
else its members care to uncover
The veto ak Is still hanging in the
hall
Financing the federal government
seems to call for continuous heavy
drafts OF money and Secretary Mellon.
in keeping conditions ripe to care for
needs OF the Treasury in its perpetual
refunding operations. will oppose any
bonus measure with all his power There
will be no end to this refunding from
time to time until our debtors lioufda re-
their obligation, and of this there seems
to be small chance in anything like the
even distant future.
Who Paid tf
Thus far Germany has effected her
reparations payments and paid the
expenses of government and the cost
of maintaining the armies of 'occupa-
ton practically through one means
only-the sale of marks. German
financial experts put the losses of
foreign BUYERS of marks as high as
$4,000. 100000. The losses of Ameri-
can purchasers, according to a
Reichsbank statement. are somewhat
less than S960.00O,000. One German
newspaper places total foreign losses
since July. 1921. alone at 125,0O0, 900
pounds sterling.
BILL Paid by Others.
These figures are amazing. all the
more so when one considers their
source. They would indicate that
Germany's former foes, as well as
certain neutral countries. not only
have paid the equivalent of Ger
many's reparations payments to date
but a considerable sum in addition
for these payments have amounted to
no such sum as $4,000, 100000
"Germany's fiscal policy since the
armistice has been indefensible unless
it has been dictated by the purpose
CT making her former enemies foot
aer bills. AS piece of fiscal admin
,stration, IL Ia. been both unsound
and absurd. A we'll known German
financial journal. Die Bank, recently
criticized the governmental policy un-
sparingIy. 1t went further and de-
slared that il Vas possible for the
government u bring the decline in
the mark to an immediate halt by
ordering the Reichsbank to stop is
suing notes with no metallic money
backing The article in question
argued also that the abandonment OF
the policy of unlimited issues of ir-