Daily capital journal. (Salem, Oregon) 1903-1919, 1916-07-05
Events of Week Suggest
More Favorable Outcome

May of $243,O00,OO0, which is also tae
largest ever recorded. No wonder the
influx of gold continues in unexpected
volume. About $ll0,U00,000 in gold
arrived during the past six weeks, with
considerable more to follow. Much
larger quantities Of the precious metal
would have come had it not been for
successful manipulation of exchange
by the British government; skillful
mobilization of securities, and the
placing of various loans and credits.
1t has been deemed wiser to send gold
than TO depreciate British holdings of
American shares by pressing them too
freely for sale. the disposition is to
continue holding these securities as
collateral for future loans. This poll
cy is an important factor in strength
ening the New York market, since it
lessons fear of foreign liquidation;
while the large influx of gold tends to
ease the home money market and sus-
tain security values. This country al.
ready possesses a fabulous sum of
gold, and its domestic output is gen
orally about $l00000,000 a year; all of
which enormously tends to strengthen
the country financial resources.
Summarizing the financial situation,
we find the European war has been
practically discounted as an immedi-
ate factor. The Mexican problem is
also an influence largely discounted
and of moderately disturbing poten-
tialities,-the favorable turn of events
on Thursday having caused consider
able relief. Our crop situation, though
backward, is promising because for
eign scarcity insures good prices and
good demand for whatever surplus
we may have, especially as that sur
plus threatens to fall short of last
years big crop. A few days of warm
weather will materially advance the
agricultural position. The railroad
situation is betterng in several re-
spects. A strong public opinion is de-
veloping against radical action by the
employees. Some of the roads will be
aided by the commerce commission al
lowing an advance on Western lines,
and most of the roads are reporting
large earnings and excellent net re-
suits in spite of heavy expenses. Our
foreign trade, as stated above, is
breaking all records and presents no
signs. of reaction. Western trade
opinion is optimistic, and merchants
are backing their opinions by action.
Clearing house returns have for sever
al weeks been running about 30 per
cent anead of last year. The gains
are well distributed and, allowing for
4 initiation of values It is evident the
volume of business is enormous. The
: political campaign is exceptionally
free from disturbing issues. July dis
/ bursements will be unusually heavy,
aggregating $292, 2,000,0GO, or $l3,500,-
600 more than year ago. A number
of concerns, both railroads and indus
trials, are resuming suspended diW'
dends, while not few are declaring
extra dividends. The monetary out
look is very favorable in all sections
of the country. Funds are abundant.
Under such conditions, the prospect
is for good July investment demand.
In view Of recent liquidation, there is
little or no reason for further indul-
gence Of bearsh apprehensions. The
general outlook is bright and prices
show slightly improving tendency.
Some liquidation may occur in antici'
patton of the nolidays, since many op.
orators will undoubtedly be absent
from the city from Friday to Wednes-
day and much may happen in that in
terval. 1t must also be remembered
that the market is exposed to big new
foreign bond issues when conditions
are favorable; also that our own gov
eminent may come into the market at
any time for funds to finance Mex
lean campaign. Fortunately, the treas
ury is in good financial condition
Just how war with Mexico would be
financed has not yet been determined
whether through increased taxes, short
term obligations or issue of Panama
canal bonds. If necessary, all three OF
these resources can be tapped. Need
less TO say times are strenuous and
the market is sensitive TO daily hap
penings which are beyond any fore
sight. HENRY CLEWS.