Daily capital journal. (Salem, Oregon) 1903-1919, 1914-07-24

The Markets


because rails and rolling stock are wear
ing out and must eventually be replen-
ished. 1t seems, therefore, the height
of economic injustice to refuse to rail
roads the right to do what every other
business interest is forced to do, which
is to compensate itself for unavoidable
increases in expenses, by increasing its
charges for services. A refusal to rec
ognize this principle would mean SER
iOus consequences, and, if the credit
and the service to the public of Amer,
lean railroads are impaired in the early
future, the responsibility should be
placed upon those directly responsible.
The interstate commerce commission
has done good service in exposing some
of the glaring evils in railroad manage
ment, but the time has come for recon
structive work and the display of a
judicial attitude rather than that of
persistent prosecutor. Missouri Pacific
affairs have also occupied 'muci at
tention and added to the general lack
of confidence. Rumors as to the finan-
eial condition of some of the weaker
roads further tended to depress the gen
III hdihCls Int Oldlllu 1dliuIt SttulS
to have disappeared as disturbing eff
feet, and the present outlook is that
other seriOusSeonsequen in that quar-
ter will be averted.
Domestic business conditions are de-
cidedly confused. 1t can not be said
that there is any decrease of trade at
large; probably not more than five or
ten per cent below last year. The sit
uation, however, is decidedly spotty,
and some industries continue to show a
very marked shrinkage; notably in the
iron trade. The latter has, however,
shown a moderate tendency toward re-
covery, but orders are still far below
the normal, mainly because of the i'm
paired purchasing ability of the rail-
roads. The textile outlook is fairly sat
isfactory, and a considerably larger
business transpired in the New York
dry goods market as result of the
rush of buyers to attend the Claflin
sale. One striking feature in the situa-
tion is the contrast between the optim-
ism of the west and the pessimism of
the east. On this side Of the Alleg-
henies depression is almost universal
for reasons that are now well under
stood.
Adviees from abroad are not entirely
satisfactory. Evidences of OVERRIDING
in the chief capital market of the world,
London, are decidedly suggestive The
capital applications at that point in the
first half of the current year aggregat-
ed $750,000,000, against $600,O00,O0O in
the first half of 1918. The largest in
crease was in Colonial loans and rails.
a goodly portion of which was absorbed
by Canada. 1t is worthy of note that
large share of the original issues had
to be taken up by underwriters owing
to the failure of pubic subscriptions.
1t turned out also that the big Paris
loan recently flOated was not so largely
oversubseribed as at first reported, and
some disappointment followed in conse-
quenee. At Vienna and Berlin there is
renewed uneasiness because of the un-
satisfactory Balkan outlook.
/ Taken as a whole, the outlook is that
good crops, easy money, the elimination
of Huerta and the more friendly atti-
tude of the administration at Washing
ton will do much to offset the many un-
I favorable conditions, which have al
ready been largely discounted. Better
grade securities are selling at attractive
prices, and there is a quiet absorption
of these going on which will ultimately
lead to a scarcity and better prices.
1t is rumored that the rate decision will
be announced this week If so. it will
serve as controlling factor for the
time being. Should favorable deeis-
ion be forthcoming, which just now is
less hopeful, but, if otherwise, it will
/ do much to restore confidence among
investors and industrial leaders. If the
decision is unfavorable, still lower
prices may follow unless the effect be
discounted in advance. For this reason
continued caution is necessary in all
/ financial transactions.
HENRY CLEW.