Daily capital journal. (Salem, Oregon) 1903-1919, 1916-02-16
Foreign Relations Important
Factor In All Speculations

Khen. all returns are in the ratio will
probably be still greater. In December
the increase in earnings was over 36I
per cent, and in November about 81 per
cent, compared with almost no gains of
consequence but frequent losses unit
September, 1915, when the roads re-
ceived a sudden and pronounced i'm
petus from the moving of>our big crops;
which we repeat has been the essential
factor in our present prosperity, al
though the war as an inflationary ele
ment is playing a very conspicuous part.
The railroad situation has also been i'm
proved by the more reasonable attitude
of the public toward large corporations,
and the prospect of their being better
able to secure o square deal in the fu
ture. The only cloud upon the railroad
horizon is coming labor troubles. The
excessive demands Of employers seem
likely to be insisted upon, and while
the roads are in a better position to
make some concessions than for some
time past, it would appear doubtful
that the dispute will be settled without
more or less disturbance and possible
loss. The labor outlook in the coal re-
gions is also unsettled. Demands will
be made which cannot be met without
advancing the price of coal, something
which will not be very pleasing to con
sumers in view of the constant rise in
the cost of many Of the necessaries of
life.
Our foreign trade continues in salts
factory condition. Exports are heavy,
though slight abatement seems to be
anticipated by reason of the fact that
the crop movement is on the wane and
munitions shipments for the time being
appear to have reached their zenith.
Imports are also inGHeasing, which
tends to encourage a return to more
normal conditions in our foreign com
merce. The foreign exchange situation
continues to improve, the return of
American securities from abroad and
the establishment of credits here as well
as the influx of gold having effectually
| removed all weakness in this direction
The investment inquiry for securities
has somewhat diminished, as this mar
ket is now awaiting the placing of i'm
/ pOrtant foreign and other loans which
are shortly to be issued. 1t is under
stood that loans aggregating nearly one
billion dollars are in process Of negotia-
tion on this side and may be placed
next spring These estimates may or
may not be exaggerated, but they in
evitably have an important effect upon
this market. Such abnormal demands
for capital unavoidably mean high re-.
turns and higher rates Of interest
/ Moreover, the marketing Of such vast
amounts Of securities means the dis.
placement to considerable extent of
other investments. On the other hand,
those in charge of these negotiations
will undoubtedly use discretion and ev.
cry effort to avoid any disturbance in
financial conditions. In fact to sue
cessfully market such mass Of bonds,
it may be desirable to give the general
market greater or less appearance Of
strength. Furthermore, this contingency
had been long expected; preparations
have probably been made in advance.
and the effect on security markets will
doubtless have been largely discounted
when the event arrives. The better
tiusb VI IullIDdu s0dIeS ana ponds mas
lately received considerable attention
from both investment buyers and specu.
lative operators. In the industrial
shares more or less discrimination is
necessary. The so-caled war stocks
have been handled with more discretion.
and the industrials not directly depen.
dent upon war orders, especially steels,
coppers and chemicals. are more favor.
ably regarded than others. Many of the
better class Of industrials are benefit.
ing largely from the improvement Of
home conditions and entirely indepen.
dent Of war orders Steel trade activity
continues unchecked. and many con.
Germs have sold their entire output for
| 1916 at top prices. Labor is well EN-.
ployed at good wages, and as the farm.
ing classes are also enjoying prosperity
the buying power Of the masses is ex.
eeptionally great; hence the outlook for
continued trade activity during the
coming spring and summer months is
excellent.
HENRY CLEWS.