Daily capital journal. (Salem, Oregon) 1903-1919, 1916-10-07

tlt-taklnR Dy large interests III tne II
nancial markets this week, new invest.
ments and speculative buying has been
sufficiently effective to more than
maintain the Stock Exchange price lev
ell. On Saturday last the sales during
the short session exceeded the l,000,-
600 mark. Monday full days session
contributed a total of 2, 100000 shares.
To duplicate such figures we must go
back to the exciting times of 1907.
They are suggestive of the enthusiasm
and public interest that at present are
prevailing
The main features in the general fl
financial situation may be considered to
include, (D the impression that has
become so widespread that European
liquidation of American securities has
approached close to the point of com
pletiOn; (2) that the termination of the
War of Europe, devoutly as it is to be
desired, does not promise to be one of
the immediate probabilities; (3) the un-
mistakabe evidence of initiation in
which all of our national activities are
so freely participating; az the phen-
omenal earnings that are appearing in
the official statements of our great
railway systems and equally great in
dustrial combinations; and (5) the re-
markable ease in the money situation
and the fact that the financial require
ments for marketing the crops have been
completed for the season.
Have American Securities.
As to the elimination Of the selling
by foreign holders, an interesting state
ment compiled under the direction of
President Loree of the Delaware 4
Hudson company, which was published
early in the week, is not antagonistic to
this conclusion. Mr.. Loree shows that
there were still held abroad on July 81,
1916, American railroad securities of a
par value of $l,4l5,62S, ,562, but having a
market value of only 81, ,ll0, 1884, 900. One
year irevi tn rarebhetebyz taoiin
year previous-on July 81. 19l5-the
par value OF the securities held abroad
was 80, ,223, $40 ,229, showing reduction
Of substantially $500 0,000, 900, while com.
pairing with similar statement on
January /, 1915 the reduction is close
| to $780, 100000. When we consider
the large volume of securities returned
to us during the Balkan wars, as well
as the fact that Mr.. Loree S compilation
refers only to railroad securities and
does not include industrials, it is pos
sible to appreciate in something like def
mite measure the tremendous power of
absorption that has been displayed by
American investors during the last few
years. AS to the 81 100 100000 market
value of railroad stocks and bonds yet
in foreign hands, there is apt to be some
misapprehension as to the volume avail
/ lal, 20 fuptbar calag In tho fipct r,lona
Holland and other neutral countries are
participating on scale quite in keeping
with conditions at home in prosperity
and initiation as Il direct result of the
opportunities furnished by the war.
England Controls Large Sums.
Dutch holdings are not likely to be-
further reduced, and unless the New
York Stock Exchange price level be-
comes irresistibly attractive the hold
ings Of American securities in other neu-
trail countries will not improbably be
fully maintained if indeed not sub
stantially increased, in the near future,
since it would be difficult for capital
lists in those countries to find more at
tractive investments than American
railroad securities. In addition we must
not forget the very large volume of
mobilized American securities controlled
by the British treasury under the de-
| post or loan part of its mobilization
scheme. 1t will be recalled that $-l00-
000,0U0 of such securities were deposit
ed as part of the $500, ,000,0 900 collateral
| for the $250,000,000 British loan as re.
Gently arranged with American bankers
! at this center. Future loans of similar
character are understood to be in con
| temptation, to be arranged when needed.
| 1t is not unreasonable to assume that
| the collateral must be quite as attrac
tive as in the transactions yet to come.
The British chancellor must be prepared
to continue to include substantial part
of American securities as the security
for ensuing loans, Meanwhile, as the
British treasury has merely borrowed,
not purchased, the securities in ques.
tion, there is slight probability of their
sale Instead they are to be tied up un
! til after the conclusion of thre war,
when they will be returned to their
present owners.
Absorption About Completed.
ii it may be accepted as conclusive
that foreign selling is eliminating, an
important point in railroad finance has
been reached. Our great transportation
lines are severely in need of new capital
for improvements. for extension and
adequate equipment in order to place
themselves in proper position to conduct
their business rs common carriers. There
has been no serious attempt by them to
appeal to the capital market during the
period of European liquidation. Any ac-
tion of this kind would obviously have
been unwise since it would have meant
competition with the cream of railroad
Investments, such as were so distinctly
the feature of foreign holdings. As mat
ters now stand, however, il this compe-
tition for the lunds of investors is end
ing, railroad managers will find induce
ment to take advantage of the phenom-
enally favorable revenue statements
that are being presented in the annual
as well as the monthly traffic aud fin.
ancial statements. Recent annual re-
ports have shown, for instance, such
magnificent results ms about II per cent
earned on the common stock of the
southern Pacific, the Atehison and the
Reading roads. These figures may be
accepted as representative of the rail
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