Daily capital journal. (Salem, Oregon) 1903-1919, 1916-06-07
Business Is Satisfactory
According to Expert Clews

600 ON I $. Steel, which paid nothing
year ago, Not few industriaIs
could have paid larger dividends, but
prudence dictated a conservation of f.
nancial resources, such as reduction of
debt, improvement of plant and build
ing up of reserves. During the past
year 2l6 companies reported profits of
$ISO,OO0,0O0, or $350,000,000 more than
a year ago; the steel companies showing
an increase of $S7,000OO0, the ammupi.
ton companies $66,000,000, the copter
concerns S43,000,000 and petroleum
companies S3S,O00,000. A wear AGO
these companies earned about per
cent on their capitalization, while in
the year just ended they earned over
l3 per cent Building operations would
probably be upon larger scale were it
not for the high cost Of baterials and
labor, which delayed many new enter
prses. The railroads are also deferrinp
their purchases for improvements and
rolling stock as much as possible for
similar reasons. The steel industry con
tinues in satisfactory condition and will
be fully employed for months to come
at profitable prices The one important
factor that is not encouraging is the
crop outlook, the season being back
ward and without any bumper crops yet
in sight. On the other hand prices are
relatively high and with the surplus
left over from last year, moderate crops
will insure good prices for the farmer.
The stock market is laboring under
several adverse conditions, and unable
therefore to reflect the favorable busi-
ness conditions referred to above. CHIEF
of these obstacles are the presidential
campaign, the war, our relations with
Mexico, the influx of securities from
abroad and somewhat closer money
market. The political campaign is real
ly less exciting than usual and seems
TO be one of men rather than Of issues.
The latter promises TO be mainly patriot
ism and preparedness, with prospect OF
the tariff coming into prominence later
on. The war goes grimly on. There is
u FLOOD of peace talk but no trust
worthy signs Of action in that direction
thus far. The desire for peace grows
in intensity, but so does the bitterness
Of the struggle, which is not likely to
end until defeat, actual or potential,
brings submission. Mediation lust now
would be useless and possibly harmful.
The Mexican situation is again threat
ening and delicate in the extreme. This
government is certainly patient and
long suffering an intolerablc situation.
The pressure Of foreign sales Of Am
erican securities has certainly been a
depressing factor in this market, and
but for this obstacle many Of our high
class issues, especially railroad shares
and bonds, would be selling at higher
figures. American investors have had
exceptional opportunities of buying
American investments upon favorable
terms, and these seem likely TO eontin-
ue under the additional tax of 10 per
cent upon the revenue Of British hold
| ings Of Americans. Reliable advices
| from London intimate that the British
government will not force or weagep
the market for American securities; o
policy that it undoubtedly follows from
self'interest and quite in line with pre-
vious action. The consequent return OF
/ foreign securities viii tend to improve
the foreign exchange situation and
check the imports Of gold which have
recently been resumed by arrivals OF
over $2S,O00,0O0 from Canada, where
the Bank Of England has a considerable
deposit. The local money market has
lately been somewhat firmer, owing
to the expansion Of loans and desire
on the part Of bankers to exercise moro
discrimination. Bank reserves, accord
/ ing to the last statement, are down to
$G7000,000, q decrease Of Sl07,000,O00
since the end Of January, due chiefly
to reduction Of 1922 100000 in cash
reserves and in part to an expansion
Of $llS,OOOOOO in loans in the last four
months
HENRY CLEWS.