Daily capital journal. (Salem, Oregon) 1903-1919, 1915-09-22


tone. The weeks developments again
encourage confidence that satlsfac'
tory settlement will be reached Of the
renewed strain in our relations WIN
Berlin tAat followed the note from the
German ForeigR Office seeking TO Jusu'
fy the sinking Of the steamship Arabic:
The note was disappointing, IN view OF
the assurances previously given on De-
half of his government by Count Won
Bernstorff, the German ambassador
However, there seems real basis Tor the
belief that the entire question OF SUD
marine warfare, as affecting the inter
ests of Americans, is now IN satls.
factory way of adjustment. What IS OF
equal Importance from the financial
viewpoint is that this settlement prom
ises to be permanent in character, thus
removing what seems to be the prime
source, if indeed not tae sole source,
from which future shocks TO the friend,
| ly relations between Washington and
Berlin might be expected.
While the negotiations Just referred
to have been in progress there, not un,
naturally, mas been some indication OF
restraint upon entering new stock mar
ket commitments. Additional lneen-
tive for delay, too, has appeared from
the varying reports concerning the
probabilities of the successful flotation
of the large loan CG credit tnat the
British and French commissioners nave
come over TO our center to negotiate.
No specific details seem to have been
announced thus far Of the proposals the
commissioners are prepared to make
or accept. That the visit of these for
eign experts must end with success IS,
| think, a foregOne conclusion. The
question is one as vital to the inter
ests of our own country as it is to the
countries across the sea. If our grain
and foOdstuffs in general are to be sold
to the nations that under current con.
ditions are our natural customers, If,
too, the products of our factories as
well as our farms are to 90 forward in
such volume as will mean prosperity at
home, it is imperative, under present
unexampled conditions, that proper fin
ancial facilities be afforded the buy
ers. The question is the old one that is
so frequently misunderstood of the diff
ference between money and wealth.
There is no question that the British
and Frencn governments have ample
wealth with which to back up any Obli.
cations they may undertake. The terms
on which Che credits they desire may
safely be left TO the wisdom of the ex-
pert interests who are conducting the
transactions. 1t would be conservative
and good Judgment, | think, to confine
the credit, at any rate to start witn,to
say 500 millions.
The success of the negotiations, as
have intimated, means much for our
own country. 1t would provide in the
first place not only for the continuance,
but for q very substantial increase in
the volume of our expectations 1t has
wnat may be termed vital bearing up
on the great granger sections of oui
country since it will decide whether the
Entente governments will be promp
and liberal purchasers OF our grains a
remuneratiye prices at the beginning Oi
the season or whether they will Civ,
preference to other sources of suppl,
and hold back so far as our own grail
is concerned until the eleventh hour
This would expose Ur grain more free
ly to the possibilities of the release o
the huge quantities of Russian wheat
the growth Of two seasons-that ar
stored up awaiting the opening Of tn
Dardanelles. AS to the date that thi
event will occur any prediction woul
necessarily be mere guesswork. Their
are some authorities who are convince
that the task is superhuman. On tn
other hand, with four of the world
, great nations deliberately proceeding I
accomplish this great task and maxim
actual even though slow progress da
by day, the possibility of success
suen as to clothe the subject with sui
ticient Importance TO merit considers
tion as one of the prime factors in th
. broad financial problem.
< With the possibility Of the Unite
/ States becoming an active participant
Y in the European struggle so greatly r,
moved and with the success of tn
Anglo French loan so clearly in sigh
theoutlook for the market for securitiC
! may be regarded as having correspond
iugly improved The favorable none
Z outlook will not be modified material
by the practical steps taat win be col
cerned in the credit that is being n
! ranged. The proceeds of the loan al
1 not to leave the country. They win r.
main on deposit in the banks and trui
companies until needed and will retuI
to the banking institutions when II
payments for supplies for which the
are intended are made. According
last Saturdays New York Clearin
House statement, the banks and trui
n companies added more than $l5,000,0(
to tne already uneXampled surplus ca
red above reserve requirements, brinI
ing the total up to $224, 1890 whiC
, compares with deficit (instead of
surplus) Of S350,065 900 last year
this date, which Of course was a periC
when all the financial, industrial al
mercantile activities OF our eountl
were suffering the first shock OF wa
We now have reached the active peri,
OF crop financing. IL is evident th
there is to be no strain resulting fro
tnis Feature during the present year
The Secretary Of the Treasury has n
nounced policy of depositing COVER
ment funds in the banks OF the SOU
TO aid IN financing the cotton cro
Even without such arbitrary action al
\ II the supplies of funds were not
completely redundant as they In IA
are, the operation of the new banki
law would be sufficient to prevent al
important strain in money circles as
whole.
With such large supply OF ID
funds as at the moment exists throuR
out the country and as Is likely to ca
unue for pro,racted period, and wi
our own. country the single excepti
among the great nations of the wor