Daily capital journal. (Salem, Oregon) 1903-1919, 1916-07-27

ential factor in security markets at
present is the war financing of the al
lies. A new $100,000,o0O French loan
has been successfully launched through
a specially organized corporation, and
being an attractive investment prom
ises to find ready distribution. 1t is
expected to be followed by a huge
British war credit grant; the amount
named being 81 800, 100000 and bring
ing the British total for the war up
to over $13,000,000,000 How long
Great Britain will have to stand this
terrific strain no one knows, but her
resources are so vast that the end is
by no means yet in sight. just now it
looks as if the war will end before any
financial crisis can possibly occur.
Germany is also facing the drain far
better than anticipates; the real test
there being being deferred until after
the war. A portion of the British
loan will most likely be offered in this
country when issued; and other for
eign loans will probably follow.
A good undertone exists in the stock
market, based largely upon excellent
home conditions. Trade is very act
i've, considering this is the season of
midsummer quiet; and bank elearings
are still running over 40 per cent a
head of last year, the gains being well
distributed throughout the country. A
satisfactory feature is the reactionary
tendency of such commodities as had
risen unduly high owing to war de-
mands and actual scarcity. These de-
clines come not so muen from cessa-
ton of demand as from production
overtaking consumption. The principal
reactions have been III metals and
chemicals which were unduly inflated
by war. Breadstuffs are also lower,
though hides. leather and fruit are at
about top figures. Bradsteet's index
| finger stood at 1l.529l July L; a de-
cline of l.3 per cent compared with a
month ago and per cent with April
the previous high point. Crop re-
ports are more encouraging. Higher
temperatures materially benefited
corn, which now promises a good crop.
Wheat also improved shgatly, but no
one expects big yield of wheat this
year. Cotton reports were more fav-
orable despite damage from floods in
the south. Upon the whole the crop
outlook is satisfactory, there being no
great Gains and no serious deficiencies
In industrial circles no noticeable ces-
sation of action can be observed. The
steel trade is still running at practic-
ally top speed, and profits of the big
steel corporation are reported at the
marvellous rate of 30 per cent for the
last quarter. Of course such abnormal
results cannot last, and it is worthy
of note that this unexampled prosper
itv has not been made tne basis of any
speculative orgies, as was the former
custom. So much for the better stand
ards of conduct which prevail in Wall
street than formerly. Railroad earn
ings abundantly prove trade activity.
June reports indicated an increase of
25 per cent over last year, and this
rate promises to continue during July.
While a portion of this increase is at
tributable to better rates, the larger
volume of tral1ie is the main and most
welcome factor. The question of big
railroad strike must soon be decided,
as the men are now voting upon the
question of giving their leaders the
right to order a strike to enforce tleir
demands. The seriousness Of the stu
alton is so great that every effort will
be made TO avert so grave public
inconvenience. President Wilson has
been asked to interfere, and hope re-
mains that sober second thought on
both sides will prevent repture. New
ertheless this issue will be an impor'
tant factor in the early future. A
change of significance is the improved
situation in real estate. Mortgage
rates declined from 51aM6 year ago
to 1905 per cent. Vacant Office
buildings have been largely filled, of
ten at lower rates; money is once more
seeking investment in this direction;
dealings are on more active scale;
building permits are increasing, and
the only obstacle to further activity is
the high cost of building due to dear
materials and the scarcity of labor.
A Marvel Of Financing
One of the unrecognized marvels OF
the present war is the financing done
by the British government. Nothing
approaching it has ever been witnessed
or even considered possible. Chancel
lor MeKenna recently said war was
costing Britain $30,000,00 daily which
is at the rate of over 10 billions
year. Such figures stagger the mind
and yet, as just said, the end of thes'
resources are not yet in sight, and thu
strain though terrific is borne with rel
ative ease. Brittain's financial skill
and strength has been chiefly display
ed in her control of foreign exchange
and the ability to pay her stupendou
.. war bills. 1t is over year since tn
British government issued any per
manent loan, having paid expenses ou
: of current taxes, treasury bills an'
short term obligations. The chic
. source of British financial strength
have been huge foreign investments
unexampled banking resources AM
control of a vast supply Of gold an'
high grade securities. Great Britain
has sent about s200,000,000 gold TO
wnrds nayment of her purchases in thi