Daily capital journal. (Salem, Oregon) 1903-1919, 1917-12-21

not include increased taxes, higher in.
terest rates or present excessive deprs
citation. The Interstate Commerce Com
mission has already granted advances in
some sections aggregating about $685..
100000; which, with other advances in
prospect, will still leave a shortage of
$l23,0 100000 to be made up. Upon these
figures it is evident that the railroads
will be obliged to ask for much more
than Is per cent, especially ss expenses
promise to increase rather than decrease.
Labor and materials alone are costing
the railroads today 25 per cent to 80
per cent more than year ago.
Stock market weakness was quite rs
pronounced in the industrials as amo,
the railroads. The fall in the industries
must be partly due to exaggerated ap-
prehensions. That price fixing and gov.
crnment regulation would stop profit
ecring was known long ago. That in
creased expenses and heavy taxes would
cut deep into profits were equally rec
ognized. That prolongation of the war
would force general economy, restrict
consumption, absorb the country IS earn
ings, check new enterprise and keep
commodities on a high level were also
matters of common knowledge. When it
is remembered that the industrials never
fully reflected the effect of war pro-
fits and were never unduly inflated, it
would seem as if the recent decline had
about discounted changed positions.
There has been comparatively little war
initiation of securities in this market
high prices having been chiefly con-
fined to commodities. Yet the shrink
age Of values in the United States,
which has benefited more than any
other country by the war, has been far
heavier than in Great Britain, which
suffered much and gained nothing thus
far from the purely economic stand
point.
Money, both call and time, continues
firm. There is no lack Of loanable funds,
hut bankers are discriminating sharp
" as to both size and character of bor-
rowers. A feature of note is the new
departure Of the government in making
reasonable advances on contracts. Until
recently responsible firms had difficulty
in starting new contracts, and financial
aid was necessarily sought from bank
ers. The British government on the other
hand has been liberal in its advances
TO good parties from the start, and our
government will probably now do like
wise. The bond market continues ne
elected. It's depression was, of course,
due to the war, to the advance in inter
est rates and consequent readjustment.
Liberty bonds dispalyed growing ac-
tivity and some slight weakness, owing
TO expectations of another isue early IN
1918 on possibly a 70 per cent basis.
Foreign government issues also weak
cned under German successes and fear
of prolongation Of the war.
Tt is a fair question whether the
"Street" is not undulv pessimistlc.
Feeling is very apt to run to extremes
and the present wave in some respects
is going beyond reason, so far as pre-
sent conditions can be seen. Those who
have surrendered position and future
for sake of country and gone 10 the
front are not pessimistie. Why should
those left behind, who have made the
smallest sacrifice, he the darkest pessin-
istsg The United States has actually SUI
fered less than anv Of the belligerents.
II is still prosperous and busy supply
ing food and munitions to its allies for
which it is generously paid. We are
confident Of victory, and better times
also when peace comes. Why then this
excessive gloom in the financial dis
triet about temporary influences and
setbacksl
HENRY CLEWs.