Evening star., 1923-10-21
POLITICAL GOSSIP
ACTS ON MARKETS.
Possible Tax Revislons and
Cuts in Freight Rates
Cause Gneaslness.
TRADE ALSO UNSETTLED
Passage Of Soldier Bonus Would
Affect Liberty Bonds,
Financiers Say.
TRADE ALSO UNSETTLED
BY GEORGE r. HUGHES.
specIal pisnatc tn Tn. stsr

0Iorhun
Special Dispatch to The Star
NEW YORK. October 20.-Two Tea
lures stand out In any consideration
Of the course of the financial markets
of the week. One Is the unu~ VANITY
and nervousness exhibited by sp~ru-
lators in both securities and in "oNra-
modities. The other is the compare
tive Indifference toward foreign af-
fairs shown by the American stock
and bond markets. with only foreign
exchange. cotton and wheat sensitive
to news from abroad.
Illustrating this uncertainty in the
minds of spectators. two incident
may be used. one important and the
other unimportant The first is the
selling of sterling exchange on the
report that the British government
was about to adopt policy of delib-
report caused was evidence OF &
nervousness that took no account
either of the probabilities of the stu
alton or of the established reputation.
of Great Britain for sound financia.
policy. How any one could imagine
that with the German object lesson III
financial suicide In plain view the
most conservative and the most ex-
the world could be contemplating q
complete reversal of their policy pur-
sued amid difficulties of the greatest
magnitude ever since the close of the
war is not easy to explain.
Runors Fill Wall Street.
The other happening, in itself not
to be treated seriously. was the whis-
pered report that spread through the
street about the middle of the week
that a certain very eminent trader
just returned from abroad was about
to give out an important statement
expresses itself in the present-day
these views were contrary to those
held by the operators for a decline In
stocks The amount of attention thar
was paid to this report was fair
measure of the mental caliber that
expresses itself in the persent-day
fluctuations in prices. 1t would be
going too far to say that the stock
market and abandoned its traditional
function of forecasting trade condi-
tions. 1t is plain. however, that under
present circumstances little stress
should be put upon the significance Of
changes in quotations
Foreign Affairs Ignored.
The second feature is the way IL
which the rapidly developing crisis
in Germany has been completely
ignored by the American markets.
with the German mark depreciating
to the extreme limit of worthleSSneSS
and with civil war apparently immi-
nent, our investors and spectators
continue to be absorbed in domestic
affairs. This is evident not only in
stocks, but in bonds as well. Foreign
dollar issues dealt in here have
scarcely moved, Notwithstanding the
fact that German colIapse-tf II
comes to that-must react graveIy
upon all Europe The foreign ex-
changes, as already pointed out have
showed signs of nervousness and the
London market has been not a little
disturbed. but French dollar bonds
traded in here have either held steady
or moved only fractionally downward
1t was quite different last February.
when the French initiated the inya-
! SION OF the Ruhr. 1t may be talk
OF crisis abroad has been heard so
often that it no longer has any ef-
feet. 1t may be that the foreign
pond market indicates belief that the
situation on the other side is not so
pad as 1t seems and that eventual re
coNery Will come because il must. In
any case. 1t is striking phenome-
non.
Politics Vital Factor.
Aside from the trade outlook, which
IS not yet clear, political develop-
ments of the next few months to
come nave vitally important bearing
on the future of securities The i'm
portance OF the attitude of Congress
toward the railroads has been repeat
edty discussed. Tax revision has
come to the front this week as Of
equal Importance. 1t has been pub
licIy admitted by an administration
senator that Secretary Melons rec
ommendation for the reduction and
readjustment of taxes could be car
rled out to the amount of 100000, 600
provided that Congress makes no new
and extraordinary demands upon the
Treasury.
The Secretary has contended ali
along, and the best expert opinion
supports him, that a reduction of the
higher SurtaXeS would actually in
crease the public revenue On the
other hand is the common belief that
| the new Congress will. pass a bonus
bill. Any increase or decrease in in
come tax rates will be promptly re.
fected in the quotations for invest
ment securities. II is one of tho
uncertain factors which an investor
present or prospective. must weigh
Release of large incomes from high
surtaXes would free that much cap
ltal for productive enterprise
On the contrary. new issues of goT~
ernment securities or additional tax9a
to provide funds for so-called "s. !
juSted compensation" for fo ~mer a.
diers could not but affect lversely
not only outstanding liberty bonds
but other high-grade investments.
Worry Over Railroad Rates.
AS to the railroads. the suggestion
by the President that rates on wheat
and coal for export he reduced was
followed by the selling of the shares
of those railroads least in a position
to accept any loss of income. That
the roads the stocks of which suf-
fered the most marketwise were not
those which carry the wheat or the
coal, once these commodities are
taken for export. is not important.
The suggestion is taken to confirm
the impression that in the present
stage of politics If there were any
sacrifices to be made the chances are
It will be the railroads that must
carry the burden. In the face of tho
efficiency shown In the handling of
the record-breaking traffic this sum
mer and astumn. this may look un-
| just, but the market deals not with
Justice but with facts