Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1914-04-30
WAR AND FINANCE.

Henry Clews, the New York
finance expert. has the following to say
relative to the effect on the prosperity
of the nation and the world at large
of an out-and-out war between the
United States and Mexico:
The long-dreaded clash with Mexico
has come. What the end will be Is al
present beyond human foresight A
costly war may result, but there 1s still
hope that it may be averted The ef'
feet Of such calamity upon domestic
business should not be particularly Sc
rious. Temporarily 1t will act as a
stimulus upon certain industries. Its
effect in local financial circles has al
ready been largely discounted. Ultl.
mately it means the opening Of vast
and rich territory, especially in the
north of Mexico, to American and for
eign enterprise. Nevertheless pro-
longed period of disorder and idleness
win be apt to affect investments IN
Mexican railroads. mines, Oil wells'
ETC., unfavorably. So it is premature
to form any positive convictions re-
gardinx the immediate future value OF
these properties. The whole Mexican
situation is one of extreme uncertain
ty, and strict parallel can hardly De
found In our war with Spain. That
struggle from the nature of the case
was upon the high seas and quickly
settled. Cuba was an island. easily
approached in many directions. In
contest with Mexico our army may
have to cover large territory, noun
famous In character and Inhabited by
population Of fifteen millions, good
" portion of which will scatter to the
mountains and keep up an Indefinite
guerilla warfare, somewhat similar
possibly to the Boer war. Unless IA
vorable developments transpire, war
with Mexico will likely be long and
costly struggle. London Is a more
active market for Mexican securities
than New York. and the financial eff.
feet OF prolonged war will be felt
at that center as well as New York.
Financing of the war would prob
ably be accomplished through stamp
taxes and the issue to start with OF
per cent. short treasury notes which
could be readily marketed. Some other
forms OF taxation may also be neces'
aay. The sugar duties might be re-
stored or tax imposed upon coffee
and tea. In addition to these propos-
ais. some of which may not prove &C
ceptable, the expectation is that the
government will make liberal bond
issue on basis Of 81 per cent. 1t is
practically certain that an Issue on
these lines would be promptly ab.
sorbed. OF course bond issue would
withdraw capital from other and more
productive directions, and might tenn.
porarily depress the general bond
market. There Ia, however, no lack OF
capital seeking desirable investment,
and the government bond issue for
carrying on war with Mexico would
have little harmful effect Mexico VIII
be unable to secure any considerable
amount of foreign capital for carrying
on the war, factor which would has
ten prostration In Mexico and tend to
shorten the period Of hostilit1es. It IS
generally argued that because the
stock market made a sharp rally after
the opening of the Spanish war, sim.
liar results will follow the opening OF
hostilties in Mexico. In support of this
argument 1t is said that the Mexican
dificulties have already been fairly
well discounted, and that prices are
already low owing to the combination
with other depressing factors. Prices
OF the active stocks are now down to
about the low point OF November, 1913,
all Of the advance obtained in Janu-
arv having practically disappeared.