Daily capital journal. (Salem, Oregon) 1903-1919, 1916-08-03
After the War What Puzzles
as Badly as LiUe War Matters

acles in the present regenerative tenn
per of ner people. The same will be
true Of Italy, provided the northern
section of that country is preserved
! from invasion. Russia has been slight
iy hurt by the war. She is too vast
and has too large population to feel
: the conflict very seriously. Russia i.
| net rich country except in undevelop
ed natural resources; but her more
wealthy allies are able to give hel
abundant financial aid; and after the
war development on an enormous scale
may be expected in Russia, in which
the United States will undoubtedly
have snare. In all of these countries
therefore, we may safely look for re.
| covery from depression within a reas.
enable period after the resumption OF
peace, because these nations possess
great genius, high spirit and vast nat
ural resources which are only awaiting
new development. All three of these
countries will be literally born again
history proving that Great Britain
Germany and France have quicklp re-
covered from struggles quite as severe
relatively as the present. The same
can hardly be said of Austria Hungary
the Balkan States or Turkey. These
nations do not possess tne attributes
Just referred to, and some of them are
deeadent. For them longer period
of exhaustion is probably in store; and
their problems, especially those of the
Balkans, will be found far more diff
cult Of adjustment than those of other
great European powers.
Company Earns 40 Per Cent
The striking United States Steel Cor.
poration report for the last quarter
showing earnings of $Sl,000,000 or
over 40 per cent on the common stock,
and the successful placing of the $685.
100000 French loan were both events
of special importance. Neither, how
ever, exerted any effect upon the Sc.
curity markets, which seemed surpris-
ingly Indifferent to such developments.
Whether this is because the financial
public have become hardened to all
kinds of sensations, or whether peace
prospects, war finance or summer Ian
guor dominate the situation is difficult
to say. The stolid action of Steel
after the announcement appeared was
disappointing. Earnings were beyond
all expectations. The dividend was
less than anticipated, and the manage
ment announced that big expenditures
would be necessary for improvements,
requirements, etc. Following tne re,
port, havy selling was noticed, consid-
cradle apparently being for inside and
foreign account. Big profits no longer
exert their former stimulus upon mar
ket values for the reason that they
have been well discounted in practical
ly all of the steel, copper and war
stocks. No investor or speculator ex-
poets them to continue, and it is thor
oughly understood that large portion
of these war profits are being used,
not to bulge dividends and initiate
stocks as formerly, but for the more
legitimate purpose of retiring obliga-
tiOns, charging off heavy depreciation
and putting big industrial concerns in
strong position for facing possible re-
actio after the war. This is sound
finance and should avert or minimize
disasters That usually follow in the
track of such upheavals. 1t is in mark
ed contrast with the manipulation that
would have accompanied such condi-
tons 25 years ago.
BUSINESS SLOWING Down
General business, though slowing
down somewhat, is fairly active for
the season. Steel and munition plants
continue active and further big war or
ders are in prospect. The crop outlook
is only moderately fair. Warm wealth.
er has helped corn materially and
spring wheat is doing well, while cot,
ton is suffering from too much rain.
So far other crops in sections. The
harvest is approaching, and August is
usually a month of deterioration for
some important crops. The balance of
the season is also somewhat critical;
for if the moist, cool June and July
are followed by a hot, dry August con-
siderable damage will follow. Not
much enthusiasm can be based on the
hravest this year. The local monetary
outlook is satisfactory. Bank resourc-
es are in good shape, and the financial
situation has been greatly strengthen
ed by the influx of about 100000
of gold which began in May. There
seems to be steady selling of foreign
holdings of American stocks by the
British treasury. While these offer
ings are readily absorbed, such a stu
alton prevents any pronounced bull
market, and tends to keep fluctuations
within safe limits. Needless to say
that the big profits and extra divi-
dends which many industrials are max
ing are an important factor in the in
vestment situation. such funds going
largely into high grade bonds and
strong boxes.
HENRY CLEWS.
LINER BRITTANIC SUNK