Daily capital journal. (Salem, Oregon) 1903-1919, 1917-01-20

New York, Jan. l9.-- The stoei
market has not yet fully recovered
from the peace note effect. During
the interval there was a very consider
able rally from extremely low prices
but no really permanent recovery. II
is quite apparent that the losses thus
incurred took off the edge from the
bull market and crippled many specu
lative operators on the long side. 1t i:
equally evident that larger owners Of
securities have not been ready buyers
on the decline, but preferred selling on
the rallies, although support generally
developed whenever decided weakness
occurred. Unless appearances are mis-
leading, there has been persistent in
side liquidation in industrials, especial
ly the war group, upon the we'll
grounded assumption that there will
be no such volume of munition orders
in 1917 as in 1916, nor any such profits
There is no denying the fact that Wall
Street is disposed to discount to some
extent an early peace. As already
stated in these adviees the mind OF
the world has distinctly ''about
faced" and is now fixed more on
peace than war. The Central Powers
claim they desire an end of war; for
exhaustion and hunger are surely un.
dermining some of the belligerents, and
human endurance is marking the limi-
tations of this ruthless destruction,
War Will Go On.
The Allies in reply to the Central
Powers have intimated the general
basis upon which they will discuss
peace. Germany may not listen to
such proposals. Mediation by neutrals
at this time would be offensive to the
Entente and failure; so the war must
90 on some time longer, or until both
sides come nearer together on terms.
Great Britain evidently does not
anticipate an early end to the war,
Judging by the fact that she is about
to float another huge loan, the biggest
in history; no limit having as yet been
placed upon it's extent. Nevertheless,
the growing desire for peace is becom,
ing more general on both sides and
will hasten its consummation, which
may not be many months away and is
likely to come when least expected.
War orders Grow Less.
The cessation of war orders which
gave such an impetus to prosperity IN
the United States would in any event
have come ere long as a result OF the
growing independence of the Allies IN
munition manufacturing. Great Brit
ian was already practically producing
all her own munitions, and partially
supplying her lilies; while only the
other day British muntion nrm
made a bid for supplying this govern
ment with shells for one of our own
readnaughts at figures much under
American prices. The amount OF TINS
contract was not particularly import
ant. but the difference in prices was
ratherSsiqnificant in view of the neees-
sity for increasing our future export
trade. Less than half of the inc ease
in our exports during the last fiscal
wear was due to munition orders, winch
in the mass constituted only about one
third of our total exports. The es-
tabishment of peace would reduce re-
cent abnormal shipments OF automo-
hiles. horses, mules, leather, copper,
etc INIT these losses would be partial
" offset by increases in cotton, petrol
cum, steel products for construction
purposes, machinery, and the IKE
What the not losses would be to her
exnort trade, therefore, it is impossible
to estimate, though present dlsposltloh
Is to considerably overestimate them
Our most serious difficulty in MAIN
tanning our export trade will be the
high cost of production in this coun-
try compared with Europe. The neces-
sitv of finding a market for our sur
plus products, which win become more
imperative when conditions return 70
the normal, is problem that VIII nave
to be gr ppled with seriously at no
distant date. We must have export
trade, and we must be prepared to meet
foreign competition. The worlds mar
kets are comparatively bare OF mef,
chandise. so that sheer necessity Will
compel liberal purchases by belligerents
and non-belligerents; and unless the
United tSates is prepared to let slip its
interest in foreign trade, American cap