FINANCIAL COMMENT GOVERNMENT ADMINISTRATION AND INVESTMENTS

F

EDERAL control of railways, pricefixing in raw materials, and restrictions on the financing of new enterprises are all having an effect on security values. This effect, while not immediately apparent, will come to be recognized by investors as highly beneficial. Such considerations as the German drive, the new income tax measures, the Russian collapse, and inflation will always harass speculators. The stock market will reflect hopes and fears. But the people who occasionally invest in bonds and mortgages and who invest for safety and a fair income are at this moment afforded opportunities of a generation opportunities in investments which, under Government guardianship, will unquestionably pay interest semi-annually and principal at maturity, and otherwise act as the investor has a right to expect.

These are times when ordinary expectations are all upset, times when serious and conservative old corporations, successful beyond measure in normal times, are embarrassed, while others upstart in prosperous careers. Under these conditions, Federal control over commerce, industry, transportation, and public service is a good thing.

There are some who will assert that the United States railway administration, for example, is indifferent and inefficient. In citing cases they will sustain some points of their criticism. But some of the economies involved-for example, the pooling of freight movements or the unification of terminals and ticket offices are so obvious that the fair-minded man must withhold conclusions.

But what has all this to do with railway investments? Simply this: That while the Government is making these experiments, under warrant of war contingencies, it has practically guaranteed interest and dividends on railway securities. It has guaranteed them in so far as the railways were themselves compelled to take care of such obligations before the Government interfered.

The attitude of the Federal Railroad Administration on railway problems is so far in advance of the attitude displayed by the Inter-State Commerce Commission in recent years that the Commerce Commission must be suffering from chagrin. As against the Commission's insistence on competitive operations, the railways of the United States are now being run as one great unified system; as against the Commission's reticence on rate increases, a general increase in freight rates of twenty-five per cent and a substantial increase in passenger rates have just been announced by Director-General McAdoo.

While capital may shrink at the thought of Government ownership, this reaction in the Government attitude will gradually clarify the whole railway situation. It will prove the efficiency of labor under Government operation; it will demonstrate the value of unified control or will suggest economies which have been unfortunately ignored. And when the experiment is over the investor in railway securities will be better off than he has been in recent years. The outcome presents two possibilities, both favorable: (1) Either the railways will revert to their original status as private corporations, in which case they will be in a much stronger position, their problems

PUBLIC UTILITIES COMPANIES TO RECEIVE GOVERNMENT AID

About $225,000,000 first mortgage bonds of electric railway, electric light and power, and gas companies fall due in 1918. It is expected that the War Finance Corporation will aid them to pay or refund these maturing obligations. The aid is by no means gratuitous, as the utility companies will be required to give good security and will pay

a reasonable interest rate.

President Wilson and Secretary McAdoo have both stated that these properties perform a vital service in war work. Mr. Wilson is quoted as saying that "it is essential that these utilities should be maintained at their maximum efficiency."

In order to meet increased cost for labor and materials and to secure high efficiency, it will be necessary for these companies to show improved net earnings. While the War Finance Corporation will undoubtedly

render sufficient assistance to tide over the difficult capital requirements, increased rates for service are being granted in many parts of the country, particularly to traction lines. Public Service Commissions are slowly acceding to the demands of the corporations and a somewhat brighter outlook for public utility securities is noticeable.

QUESTIONS AND ANSWERS

Q. I expect to get hold of a lot of Second and Third Liberty Bonds, and would like to ask you if you can give me the address of parties willing to pay cash for these papers.

A. Any reliable banking house would be willing to sell the Liberty Bonds you have at the prevailing market rates, and will charge you a very small commission for executing your orders. It will be necessary for you to forward your bonds to the banking house you select. Remittance will be made as soon as the sale is consummated. The quotations of these bonds appear daily in the principal newspapers.

The whole country has just completed a campaign which had for its purpose the placing of these bonds among large numbers of private investors. Every bond that is resold annuls just so much of the good work that has been done by the patriotic persons who have helped on the Liberty Loan.

Q. Please explain the security for Federal Farm Loan bonds. I am informed that they are issued by Government Land Banks, and that they are free from State, municipal, local, as well as income taxes. Is this correct?

A. Your information is correct.

Federal Land Bank bonds are secured by the deposit of an equal amount of United States Government bonds, or first mortgages on farm lands cultivated by the owners, which mortgages are appraised and guaranteed by the local National Farm Loan Association, of which the borrower is a member or a stockholder. The amount of loan to any one borrower cannot in any case exceed $10,000, and before it is made the land must be investigated and appraised, and a written report made by an appraiser or appraisers appointed by the Federal Farm Loan Board.

The Federal Farm Loan Board may at any time call upon any Land Bank for additional security to protect the bonds issued by it, as every loan is made on an amortization plan, and the principal of each mortgage will be regularly reduced, thus affecting a continuing increased equity between the loans and the land value. No mortgage loan may exceed one-half of the appraised value of the land, or twenty per cent of the appraised value of the permanent insured improvements.

Q. Which of the French cities bonds would you prefer Bordeaux, Lyons, or Marseilles? They are offered to me at 89% to yield 14 per cent to maturity, April, 1919 ?

A. There is little to choose. Lyons is à manufacturing center; Bordeaux and Marseilles are seaport cities. We trust that one is as safe as the other.

Free Booklets for Investors

Danforth Farm Mortgages. List No. 58. A. G. Danforth & Co., Washington, Ill.

National Thrift Investment List. Federal Bond & Mortgage Co., 90L Griswold St., Detroit, Mich. Kansas and Oklahoma Farm Mortgages. The Humphrey Investment Company, Independence, Kansas; McAlester, Okla.

Bonds Legal in New York and Massachusetts. Bonds Legal Z-69. The National City Company, National City Bank Building, New York.

FICTION

First the Blade. By Clemence Dane. The Macmillan Company, New York. $1.50. The author's former novel, "Regiment of Women," received cordial praise. The present book is also of excellent quality. In some ways it is a little lighter in tone and talk than the first book. It is really a comedy (a much-abused word nowadays) of social life and of the reaction of character. There is also in it not a little quiet humor. A girl and boy who grow into manhood and womanhood develop their traits of temperament and personality gradually, and the growth is rendered forcefully and subtly. Johnny Pryde. By J. J. Bell. The Fleming H. Revell Company, New York. $1. Johnny, the grocer's boy, is as good fun in his way as was Mr. Bell's "Wee MacGreegor" in his.

Lonely Stronghold (The). By Mrs. Baillie Reynolds. The George H. Doran Company, New York. $1.35.

Bird Woman (Sacajawea).

The Guide of Lewis and Clark. Her Own Story. Now First Given to the World by James Willard Schultz. Illustrated. Houghton Mifflin Company, Boston. $1.50.

This is the romantic story of the Indian woman Sacajawea, who helped to guide the Lewis and Clark expedition across the Rocky Mountains. "Intelligent, cheerful, resourceful, tireless, faithful, she inspired us all," said the Lewis and Clark Journal of her. Mr. Schultz tells her story as he heard it from aged Indians, and contrives to get the real atmosphere of the tepee into his narrative.

Northcliffe: Britain's Man of Power. By

William E. Carson. The Dodge Publishing
Company, New York. $2.

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Whatever may be the differences of opinion as to Viscount Northcliffe's influence on English journalism, none can deny that he is a man of power." This book about him is frankly laudatory, but it tells the story of his career in a most entertaining manner. Northcliffe's influence on the conduct of the war receives special attention and makes absorbing reading. Wonderful Story of Joan of Arc and the Meaning of Her Life for Americans (The). By C. M. Stevens. Illustrated. The Cupples & Leon Company, New York. $1.50. The inspiring life and the unspeakably pitiful death of this heroine of France are fully described in this recital of one of the greatest tragedies of history. Too much honor cannot be done in our day to this martyr to the savagery of her own time, and this fervid eulogy of the Maid is peculiarly welcome now, when devoted women are taking a more active part in the great drama of European history than ever before.

HISTORY, POLITICAL ECONOMY, AND POLITICS Last of the Romanofs (The). By Charles Rivet. Translated by Hardress O'Grady. Illustrated. E. P. Dutton & Co., New York. $3.

This is an account of the last days of the former Court and Government, with the Emperor a more or less prominent

and pathetic figure, but without having the. account exactly center on him. The brilliant French journalist asserts that in the whole unsavory Rasputin episode the moral character of the Empress stood untarnished, no matter how deplorable her mistakes of judgment.

TRAVEL AND DESCRIPTION

Tenting To-Night. A Chronicle of Sport and Adventure in Glacier Park and the Cascade Mountains. By Mary Roberts Rinehart. Illus trated. Houghton Mifflin Company, Boston. $1.75.

The increasing number of people who like to "camp out" will find much delight in this account of Mrs. Rinehart's expedition in the Rockies. It was a real expedition, for the party took thirty-one horses, guides, packers, a cook, and a moving-picture outfit. They went into unknown country, and had many parlous adventures. These are described in a lively and entertaining fashion that will hold every lover of the big out-of-doors.

Fighting Engineers (The). The Minute Men of Our Industrial Army. By Francis A. Collins. Illustrated. The Century Company, New York. $1.30.

Every one has read of the splendid service rendered by American engineer forces in the war. The title of this book tells the story. Our engineers have fought with rifle and bayonet. They have also rendered service of the utmost importance in building bridges, replacing rails, building roads, in forestry work, and in other indispensable matters. Over one hundred thousand skilled men are in the American engineer force. They form not only a large but an indispensable section of our effort in France and Belgium.

Flying Poilu (The). A Story of Aerial Warfare. By Marcel Nadaud. Translated by Frances Wilson Huard. Illustrated. The George H. Doran Company, New York. $1.35. This is a delightful, pathetic, inspiring story. It describes the exploits of a Paris street urchin who wins his way in the Aviation Corps. He is called Chignole-in French slang this stands for a little hand bit or tool. The translation, in which French direct discourse becomes admirable American, is by the well-known author of "My Home in the Field of Honor" and "My Home in the Field of Mercy."

War-Whirl in Washington (The). By Frank Ward O'Malley. Illustrated. The Century Company, New York. $1.50. These articles on war conditions in Washington, written by an experienced newspaper man, are, on the surface, amusing and flippant in manner. But they also strike with good-natured but forceful irony at red-tape duplication of effort, official dullness, and Congressional waste of time. These things were bound to exist in Washington when our National work was suddenly enlarged a hundredfold. It is not injurious, but helpful, to point out the causes, not for the purpose of scoring the men who have proved incompetent, but of showing where improvement can and must

be made.

We are sure that readers will enjoy Mr. O'Malley's picture of Washington whirling about in the war-storm; and, while official Washington may find it a little dificult to smile, it certainly can get from the book some pertinent suggestions for tuning up and speeding up war activity.

AN EXPLANATION OF THE SEVERAL METHODS OF EXPRESSING THE TONNAGE OF VESSELS

BY ROBERTSON MATTHEWS

Assistant Professor of the Heat-Power Department, Sibley College, Cornell University

The following statement may help the public understanding of our progress in ship-building. A reference to the last paragraph will suffice to show how a disagreement may arise between statements by Mr. Hurley and by the British authorities.. Thanks are due for this material to Mr. E. F. Ortlip, of the Hull Department of the Harlan Plant, Bethlehem Shipbuilding Corporation, who kindly furnished the original printed material and checked our condensed statements.

The term tonnage as applied to vessels is expressed in the following different

Dead-weight tonnage is the carrying capacity of the vessel in long tons, including fuel, fresh water, stores, etc. In fact, the dead-weight represents everything going to make up the displacement of the loaded vessel excepting what is a part of the vessel and her equipment.

For those tonnages based on the arbitrary unit of volume many other arbitrary definitions and measurements are involved.

The term tonnage is used to define the one-hundredth part of the capacity, in cubic feet, of the combined space inclosed by holds, forecastle, poop, bridge-house, deck-houses, hatches, etc., after making certain deductions and restrictions. Making these deductions gives

Under-deck tonnage is the capacity measured below the upper deck that is, the internal capacity of the vessel from an arbitrary point near the bow to an arbitrary point near the stern, the location of which points depends on the shape of the vessel.

The gross tonnage is the sum of the underdeck tonnage and that of the forecastle, poop, bridge-house, deck-houses, hatches, etc. If from the gross tonnage we take the legal allowance for machinery space, crew space, and any rooms used for the ship's use proper, as the carpenter shop, steeringgear house, chain'lockers, etc., we have the net or net register tonnage.

If we take a certain vessel, the numerical magnitude of the tonnages will decrease in the order named:

1. Displacement tonnage.

2. Dead-weight tonnage.

3. Gross tonnage.

4. Under-deck tonnage.

5. Net or net register tonnage.

Thus, in speaking of a certain vessel, we must clearly define which tonnage is meant. For example, a certain vessel has a displacement tonnage of 6,400 at its legal draft, while its corresponding dead-weight tonnage is 4,561, or 71.4 per cent of the former. For this same vessel the gross and net tonnages were respectively 2,783 and 1,647. Basing these on displacement tonnage, the respective percentages are 43.5 per cent and 25.7 per cent.