Evening star., 1914-05-03
Conflict Would Involve No Sc
rious Drain on U. S. FL
nanciaI Sources.
PROBABLY WOULD PROVE
STlMULANT TO BUSINESS
Prospects of Peace, However, Have
Beneficial Effect on the
Stock Market.

! tered upon the new week with high hopes
of a cessation of the disturbances in the
| Mexican territory. and those who were
carrying heavy short commitments found
that they had greatly erred in prophesy-
| ing the true course of future events.
The reports from Washington to the ef-
feet that both Huerta and President Will
son had agreed upon terms of mediation
came as an invigorating tonic to a mar
ket that had hitherto f1oundered around
the lowest level it has seen in many a
day. Especially was this true of those
shares which depend for their produc-
ton upon Mexican fields or upon the
commercial intercourse OF the United
States with the territory south of the
| Rio Grande.
| A notable example of the change In
| sentiment as related to the Mexican sit
uatlon was the increase of fifteen points
| In the quotations of Mexican Petroleum
in one short session, followed almost i'm
| mediately by an equal loss when it was
| rumored that the forces of Villa were
| contemplating the dc estruction of the
| company's property.
| Not Money Problem.
| Viewed from the standpoint of general
business, it can hardly be said that a
war with Mexico will be attended with
disastrous effects upon the business of
this country. Considered in it's own light.
the expense of such an undertaking
would simply be the additional moneys
needed for special transportation ard
such purposes plus the value Of prop
erty destroyed and the unproductive
! labor in the ranks of the army.
1t should not be forgotten that the men
and the ships now being sent against
Mexico have to be provided for in peace
as in war, and that in figuring the cost
of war 1T is only logical that the regular
expense of the maintenance of our mill
tary departments should be deducted Be
yond, therefore, the ready money needed
for these operations. the Mexican prob
lem Is not a financial problem, and it is
expected. to some extent, to stimulate
instead of handicap business. Such money
as is spent will be spent at home, and
Will flow into the channels Of the indus
tries that cater to the equipment Of mill
tary forces. as well as to the great food
supplying districts.
to the final outcome of hostilities in
Mexico. The only question that concerns
US is, therefore the immediate effect
of the conflict as related to money and
business. 1t is conceded that in war
times expenditures are made with a Law
ish hand. that profits of contractors and
indeed OF all interests concerned in the
supply of goods to the government are
large and that the general circulation OF
money is greatly increased The natural
ERECT of such conditions is to produce a
feeling OF enthusiasm in business circles
ana TO furnish supply Of funds that
eventually drifts to the stock market
AS to the ultimate effect upon values
| it is regarded in conservative circles that
the estimates Of the probable expense
and losses incidental to the war have,
in newspaper dispatches. been greatly
exaggerated. 1t Is not likely that it
I n fhn
or interfere with the growth of business
in the United States. and the destruction
of property in Mexico will hardly be any
greater than it would be if the various
factions there were left to fight their
differences out without interference BY
| this country.
Points for the Investor.
| There will, however. be two effects
which the investor must seriously con-
slider. The first is the necessity for an
| immediate demand for increased revenue
on the part of the government which
will tend to stiffen the money market.
SO far as can be seen at present, how
ever. the effect upon the money market
will be slight and there is no reason to
apprehend more than temporary
stiffening of rates. There will be an in
crease of taxes either by resortins to
| entirely new forms of taxation or by
| levied. The second point which the in
vestor must consider is the possible eff
feet of the check to tendencies which, if
continued, would ultimately right the
| evils in the present economic situation
and esta blish the basis for a condition
| of solid prosperity later on. The process
| of liquidation of labor will probably be
| interfered with, but. on the other hand.
there is no reason to believe that the
Improvement in business, of which we
act
will not materialiZe. although the foun-
dations of it will not be quite so strong
| as they would otherwise have become.
Finally, war does assist in the solu-
ton of the problem of unemployment,
since in the stimulation of production
more Workmen re absolutely necessary.
Should the war last for an extended
period there will be a material reduc-
ton in the ranks of the unemployed, and
Coxey will find fewer recruits than
have been attracted to him in the past
few weeks.
Foreign Markets and Trade.
The foreign markets. being so much
farther removed from the scene of hos
tilities. and dealing. as they do in Amer
lean shares on a large scale. have peen
extremely restless and agitated. As
result London and Paris. the financial
centers most actively associated with
Mexican securities. have taken on a much
more disturbed view Of the effects of
war than do the home markets The only
natural resultant of this policy Is a
heavy liquidation of what securities are
now held. and a refusal to take on any
new commitments until peasn is more
firmly established
AS regards our foreign commerce. the
figures for March. Just available. show
that this month established new high
record for imports. in the face of back
ward domestic trade. Exports. on the
other hand were disappointingly small,
leaving but $50O0.O0O in favor of this
country-as the balance of trade This
ha failllra of mex