Daily capital journal. (Salem, Oregon) 1903-1919, 1916-10-18

stock market has been influenced al
most entirely by peace rumors and war
incidents. The first caused weakness on
the theory that peace will compel
slowing down of important industries,
owing to the necessary cessation of mu-
milton orders and the rehabilitation of
| trade from war to peace basis. Peace,
it is argued, will reverse forces which
have been pushing prices to a very high
level, and values must consequently re-
cede. The second cause of weakness was
| the outbreak of submarine activities
near the coast of the United States,
which revived apprehension of difficul-
ties between this country and the cen
| tral or the allied powers. These two un-
favorable developments struck hard up
on market technically weakened by
prolonged rise and loaded to the break
ing point with big profit. Extensive
realizing was inevitable, the result be-
ing weakened and unsettled market.
Fortunately, the home situation has
changed but slightly, if at all. Industry
is active, prices are rising, and the
strictly home outlook is certainly good.
But the foreign situation, still the prime
| factor, is full of threatening possibil-
tiles; besides which we are now in the
midst of presidential campaign which
is likely to daily grow more tense and
irritating. Under such circumstances
the obstacles to a further rise at this
time were insuperable; and the financial
situation, investment as well as specu-
lative, has been cleared and strengthene
ed by reaction, which might possibly
be carried still further without serious
injury. On the other hand, the specu-
lative spirit has been thoroughly
aroused, many operators with newly
gained wealth and big resources are in
the market ready to take advantage of
every shift in the financial current. A
strong undertone of confidence exists in
the financial districts; and any favor
able development will be quickly re-
Elected in security values. AS yet no
symptoms of lessened activity are in
sight.
Commodity prices are still rising; the
general level being fully 20 80 per
cent higher than before the war. Cot.
ton, copper, steel, OIL rubber, sugar,
wheat, meats and all food products are
advancing, stimulating general unrest
by adding to the already high cost of
living. Since the war, wheat and flour
have already nearly doubled, meats have
risen 90 to 80 per cent and over. The
British government, after taking over
control of several commodities, is now
regulating wheat supplies and prices.
Textiles show substantial rise since
the war. Cotton goods are 3 to 100
per cent higher, linens have doubled,
woolens are 80 to 10 per cent above
1914 and carpets have risen go to 100
pc rcent. Thus far these advances have
been more conspicuous in the wholesale
markets than among retailers. Eventual
| ly, however they will reach the latter
class and the general consumer, who will
also have to pay for the increased costs
of distribution arising from the scarcity
and high wages of labor This upward
movement is worldwide and not by any
means confined to the United States.
The causes are numerous and somewhat
complex, and yet nearly all of them find
their primary origin in the war. First
and most serious. is the shifting of
millions upon millions of men from pro-
ductive occupations to those of destruc-
tion.- Hence the scarcity of labor and
the incalculable wastage of life, proper
ty and commodities. Nothing can pre-
vent even higher prices while the ter
rible seourge of war continues. Produc-
tion is decreasing, while consumption
and waste are constantly increasing.
Governments may endeavor to restraoin
speculation with all possible energy;
they may seek to prevent the unscrupul.
GUS from taking undue advantage; they
may secure better distribution and
somewhat mitigate the hardships of alb
normal conditions; but no government
Is powerful enough to throttle the inev.
table law of supply and demand which,
owing to scarcity, now operates irresst-
I IDLY in the direction of higher prices.
High prices are the natural correction
of such conditions and the only sure
way of stimulating production. Econ
omy, efficiency and stoppage of waste
are equally necessary to offset the high
cost of living. Even in the commercial
: world the i'll effects of the war are ain
fully illustrated, and many lessons can
1 he learned; chief of which are the in
volatility of economic law and the pen
alties which the whole world must suf-
( fer for the struggle now devastating the
continent of Europe.
Railroad prosperity continues un-
checked. Reports for 23 important lines
for the fiscal year ended June 30 show
earnings of nearly 12 per cent, com
pared with over per cent year ago,
These results were attributable to the
good crops and high prices of last year;
also to the industrial activity brought
about by the war. Railroad managers
anticipate continuance of favorable
conditions for long period to come.
The steel industry continues at high.
water mark, and the monthly statement
u of the steel corporation showing unfill.
al nr1arS IN CoNtnr,L.. n -nn nnn