Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-11-01
SUPPORT IS SEEN
IN LIBERTY BONDS
Belief Expressed That U. S.
Loans Will Not Go Much Low
er on Present Move.
BY GEORGE T. HUGHES.

special Dispatch 10 Inc star
NEW YORK, October 31.-The sag
ging of Libertys and the ups and
downs in the foreign group, mostly
weeks bond markets. Lower prices
for United States Government bonds,
Including not only the entirely tax
exempt 31os. but several of the other
Libertys are applicable on the ground
that expected lowering of income
taxes in the higher classification
will make these securities less attrac-
tive, but probably there has been a
good deal of selling by banks. who
need the money for other uses.
In any case, prices are not likely
to go much lower, certainly not much
below par, because of the option that
the British government has of paving
interest on it's war indebtedness in
Liberty bonds at par.
French Bonds Recover.
French bonds early in the week
had a substantial reaction, but later
the loss was in great part recovered.
Unlike the French francs, fiuctua-
lions in French dollar bonds are not
a fair mea sure of opinion as to the
state of French finances. On the
other hand, there is always a certain
amount of selling by nervous holders
when it appears that a new crisis is
impending in Paris. At the close of
the week all the foreign group, which
had been unfavorably affected earlier
by the heaviness in French issues.
hardened materially. German obliga-
tions were again the favorites among
European bonds and Brazils among
those of South America. The yields
obtainable in this form of investment
are still higher than are to be had
anywhere else.
Two Notable Statements.
While spectators have been alb
sorbed in their game of guessing what
the stock market is going to do next
thoughtful investors have been turn
ing over in their minds the signifi-
canoe of the paper presented by Prof.
W. Y. Ripley of Harvard University
to the Academy of Political Science.
and of the warming to the buyers of
utility securities by President NJ s.
Sloan of the Brooklyn Edison Com
pany.
Prof. Ripley points out the trend
toward concentration of control in in
dustry brought about by the wider
distribution of StockholdingS. He
stresses the point that while theoret-
ically the stockholders are the own
eIS Oh lile DlOpeIlN, DIS d IildlleI Oh
fact control and ownership are not
synonymous and that as the number
of stockholders increases it is becom-
ing more and more easy for a small
minority to direct the affairs of a
great Industrial and utility corpora.
ton.
Whether Prof Ripley's criticism is
we'll founded or not is not the main
issue. The important thing is the
suggestion that. the remedy is public
supervision of private industrial en-
terprises as distinguished from those
having "a public interest" as the
phrase is.
Warns of Speculation.
Investment and speculative buying
of industrial securities at unprece
dentedly high prices has been based on
the idea that the opportunities for
expansion and for profit were unlinlit-
ed. That is the underlying reason
why automobile stocks have SO far
outrun railroad shares in public favor
If, however, the opinion should gain
ground that the time is approaching
when the state will have to step in
to protect the interests, not simply
of consumers but of investors, we
are on the threshold of a new order
in the investment world.
What Mr.. Sloan said was only what
had been said several months before
by Samuel insult. but the repetition
shows how important the matter
bullls in the minds of the responsible
public utility executives. Mr.. Sloan
protests against the prevailing unrea-
soning speculation in utility stocks as
certain to do the industry great harm.
The utilities are limited in the
amount they can earn for their stock
holders by the control of the various
State commissions, and if earnings
should ever justify some of the re.
cent wildly inflated prices. which no
one well informed expects, there
would be an immediate and proper de
mand for a lowering of rates and
cutting of operating profits
Curious Contrast Noted.
1t is a curious contrast that the
railways have been told that 50. per
cent is a fair return on their prop
erty invested, while the courts have
set per cent as the figure that
the utilities ought to receive This
doubtless has a good deal to do with
the larger demand for utility stocks
over that for railways, but it is not
any defense for such stock market
eXtravagances as have been seen in
The past few months. This is, of
course, of more present importance
TO spectators than to investors, but
the latter are vitality concerned in
the stability of the industry