The Birmingham age-herald., 1917-02-11

With astonishingly few exceptions, the big men in Wall street whose names count for something in the financial world are agreed that it is only question of time until this country will be forced to take an active part in the great European war.
 As to what will happen stock marketwise, once that step is taken, there is a sharp difference of opinion. On one side it is being recalled that the very instant Pres ident Wilson announced that diplomatic relations with Germany had been sev- cred, the stock market abruptly stopped | declining and began to advance. From which it is being argued another bull market, especially in the war order shares, is immediately ahead. That con- clusion is not only based on this weeks higher prices for industrial shares, but on what happened in the stock market after the outbreak of the Spanish war. But against these theories it is being declared on the other side that the time
 has now arrived when holders of rail- way and industrial bonds and stocks have received all the benefits to be obtained from the war; that from now on war will be a bear, not bull, argument on in
 dividual companies and the country as
 whole; that after the first rise in stock market prices, after the outbreak of war, which will be due largely to short cover- ! ing, Wall street thereafter, with eager eyes, will look for peace and tremble at signs of long drawn out war.
 l Which of these two conflicting view points should be accepted? For both sides there is much to be said. As no one l claims our country is prepared for war, such as is being conducted on the other side ample preparedness certainly
 would create much new business. Take
 the United States Steel corporation as an example According to the figures published today, on February 1 the com 1 pany had on it's books orders calling for l enough business to keep all of it's plants
 running at full capacity for three-fourths l of this year. Thus on the basis or earn | ings just published for the last quarter | of 1916. net for 1917, with no new business
 booked, would amount to $31S, S,O00, 900, com pared with S333 625, 900 the actual figures l for 1916, $130 351 900 for 1915, and only $7l,- l 661 900 for 1914. If war with Germany is ahead of us net earnings for the last
 quarter of this year surely will not be | below the $106, 100000 just reported for Oc- tober, November and December of 19l6 That would make net for 1917 no less
 than S424OOO,OO0 against $333, 900 900 for 1916
 $13O OO0O, 900 for 1915, and $71000,OOO for 1914 | After predicting what can be expected 1 of the earnings of steel companies in case 1 of war, those who take bullish view
 of the future of the stock market point
 out tkat what will happen to the Steel
 corporation will also happen to all mu- hilton manufacturers, including the pro- ducers of raw materials such as copper, | coal, ore, transportation and thousand and one allied industries.
 l If the existing high record gross 1 earnings of our industrial companies 1 and railroads can be increased by war. 1 say, 50 per cent, those bullishly in l clined argue, net profits applicable 1 to dividends can be increased by the same ratio. If that is true war will | justify higher stock market values. | But what can be said to offset the | foregoing arguments?
 1 If this country goes into the war in l earnest every industry in any way
 connected directly or indirectly with
 the manufacture of munitions will in- stantly begin to speed up it's plants i to three shifts for the 24 hours. That will mean that there will be compe i tition for war supplies between this 1 country on one side and on the other | England and France and Russia and l Italy. What will be the result on the l cost of labor of such competition? And | how will the costs or raw ana some | finished materials be affected by the | international competition for war sup plies? Will profits be speeded up with | the increased demand for war sup l plies?
 Comparatively few business men
 who have taken any active part in fill l ing the foreign war orders will expect 1 their profits to grow with new war l orders to satisfy home demand. It is | the consensus of opinion among the
 heads of our industrial plants that the war order business in many cases in l the matter of profits proved to be a l delusion and snare. It is true that l the war order companies already have bought and paid for their plants. ex- pensive special machinery. organiza- | tiYn and experience; nevertheless it is | equally certain that our own govern
 nYAnt will not allow home plants to
 charge the exorbitant prices that were