The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1916-06-30

New York. June 24.-The rapid de-
velopment of the war-like spirit III
Mexico and its probable effect upon
the American economic and financial
situation have injected new series
of problems into the financial markets
and. while OH The surface they may
appear to be somewhat complicated,
there is not the slightest justification
for a near-panic in investments nc
natural tendency of timid investors
is to rush for cover Oh the slightest IN
dication of a storm, and at such times
il is the business OF inscriptions
stock traders to pound down thc
market and to create as many un1aV-
orable market conditions as they pos
sibly can. These elements are always
present and must be reckoncd with,
no matter what the real fundamental
conditions may be
Aside from these, however, we must
consider that there are thousands OF
investors and investment bankers
who are members of the National
Guard; and should they be called
away to the border, they will naturally
be DESTROYS of clearing up many OF
their financial affairs pending the un-
certainty of the length of their term
of absence from business
Then again, there is the larger
problem of the financing OF such an
expedition as the occupation OF any
part of Mexico would entail. Accord
to reports from Washington, the con
dition of the Federal Treasury is
such that there seems to be little
necessity for a resort to extraordinary
measures in order to finance con
siderable movement of troops to the
southern boundary. Should extra Dor
rowing become necessary, the lrca-
sury now has authority to issue $240,-
100000 three per cent bonds the only
restriction being that these bonds
must not be sold below par
Bankers are of the opinion that the
government would have no difficulty
in disposing of $100,000,0OO to $240,-
100000 worth of three per cent bonds
at this time, and that, should such
an offering be made the call from
public investment sources would be
more than sufficient to absorb it III
full. This is not wholly patriotic
consideration, for there are many in
vestors in the United States who arc
always willing to sacrifice part OF
their yield in return for the absolute
security offered by the United States
bond. The United States credit is SO
good that its bonds sell well under
prevailing interest rates for the high
est class railroad or industrial issues,
although they have an added and
very important advantage in being free
from all taxes.
Any general review of financial and
investment conditions would there.
fore not be complete without full
consideration of the fact that world
war is raging in Europe, war prepar-
atoms are being made on the Mexican
border, and presidential campaign
is in the course of construction. Any
or either of these factors taken slngiy
are sufficient to cause unsteadlnes
but when combined they offer
series of complications which are al
unusual handicap to the business an(
financial situation. At such a timC
only the sterling dividend-earning anc
dividend-payng stocks can expect t
advance or to hold their ground, Will,
those whose technical position is veal
are more liable to feel the effects o
bearish influences. The point is wei
illustrated in the market position o
the motor stocks. which, in rumor
of mergers and consultations an'
great money-making reports, sold III
to point far beyond their real value
only to give way when the real sit
uation was revealed. The railroad
prime industrials, on the other hand
have steadily held their positions il
spite of conditions which would ma
turally depress them.
Now that the subject of motto
stocks is so prominently before tn
attention of American investors, tn
following concrete reasons for lowe
profits by motor companies will b
of interest:
/. Increased production-estimati
at 100000 cars this year againS
7O3,527 last year. This country vii
at the end Of 1916, have about 3,4OO
600 cars, or more than one for ever
six families. AT this rate the Unite
States will soon be saturated with all
tomobiles. By next year the supply O
cars will almost surely succeed tn
demand for them. We will then hay
throat competition and only tn
fittest will survive.
2. The cost of material for motto
cars has increased enormously with
about a year. Copper has doubled
l4c to Csc; aluminium has trcbled-
20c to Ole; leather has doubled; van
adium steel has increased five times
ordinary steel more than eighty pc
cent-$2o to $54. Skilled labor ha
also has increased from 20 per Ger
f., to so per cent. Altogether the COS
of cars has increased from $50 to $50
apiece In some cases this increase
partly overcome by largerscale pre-
duction.
g. Higher wages are not only in
creasing the cost of producing auto
mobiles but are increasing their cos
of operation and are. therefore, re
stricting their use. There are fewe
jitneys now than there were one yea
ago. The demand for motor truck
is also much less than it would be wit
lower wages and cheaper cars.
4. A considerable proportion OF tn
cars purchased in 1915 and 1916 wer
purchased by those who are financial
unable to operate them or by thos
who will tire of them. Thousands o