Daily capital journal. (Salem, Oregon) 1903-1919, 1916-01-19

of initiation in security and commodity
values, and this is being followed as
usual by too rapid expansion in new
projects Of various kinds. Such Of this
development as is based upon our agri-
cultural prosperity and growth of popu-
lation or new foreign trade opportuni-
ties is legitimate and deserving of en-
couragement, but that portion which is
dependent upon exaggerated profits on
war orders is necessarily ephemeral and
unstable and should be emphatically
discouraged. 1t is true that the ma
jority of these war contracts have been
made with such liberal margins as to
leave many Of these concerns in good
financial and physical condition, even
if peace were quickly restored and an
end reached ON munition orders, 1t is
not. however, the original owners of
these stocks which are likely to suffer
Lut the inexperienced buyers who in
feversh haste paid ridiculously en-
hGnced prices for this class of securi-
ties. The banks have been discrimin-
ating sharply against such collateral,
and this fact as well as the caution in
sYired by bankers and conservative
commission houses, has probably effect
ually saved the country from disastr-
GUS speculation in these securities,
whose product after all is destructive
and Of relatively small value when
compared with the industrial output of
the United States as a whole. Some of
our industrial leaders, as well as promi-
ncnt bankers have been circulating
wordS Of warning with the idea of pre-
venting unwise expansion or overspec-
ulation. The head OF the great Steel
corporation attracted much attention by
his undisguised words of caution. in
spired largely by the independent steel
companies having recently made pre-
paration for 100000 tons of new ca.
pacity for steel ingots and the United
States Steel corporation for an increase
of 100000 tons, or n total of 4,200,'
600 tons new capacity. The Importance
of this increase will be be realized
when it is recalled that the total out
put year ago was about 25,000,G00
tons, and has now risen to nearly 40.
100000 tons; so that present plans will
result in nearly doubling our output for
steel ingots since the beginning Of
1915, when Of course, production was
at about the minimum owing TO the de-
preston induced by the war. Our steel
manufacturers are now agitating for q
change Of the tariff to prevent for
eign dumping. Though now ranking as
the first nation in steel production, we
only ranked about third as an exporter
before the war, When the war is over
Great Britain will undoubtedly make
great strides in this direction SO also
will the United States. Our fear Of
German dumping is probably greater
than is necessary, Costs Of production
in Germany will remain comparatively
high because Of heavy taxes, inflated
war prices, general scarcity Of skilled
labor, the suspension Of export bust
ness and the fact that Germany will
for some time to come be seriously
crippled in her foreign trade. II is one
of the boasts Of American manufacture
ers that American methods especially
in the steel trade, are more efficient
than those Of any other nation This
alone should give us a large element OF
protection and make less necessary the
revival Of tariff agitation, which will
certainly inject much uncertainty into
business affairs Besides IL is too soon
to change tariff or revenue legislation
until conditions are iuore settled on OF
peace basis.
Outside of the conditions Just REFER.
ed to, tho outlook Cor the stock market
is satisfactory. Trade throughout the
country is fairly active and profitable.
The railroads are taxed to the utmost
with the eastward rush Of traffic, the
great bulk Of which is on domestic and
not foreign account. Coed traffic
ports are to be expected for some time
to come, the basis Of this having been
the rich harvest and a general revival
of domestic prosperity in which the
railroads must share. Our foreign trade
at the same time continues phenomen,
ally active because OF heavy exports Of
food products and war munitions. Con
fldoncc has been further restored by
sterling exchange which has shown n