Daily capital journal. (Salem, Oregon) 1903-1919, 1918-06-20
WAR IS PROGRESSING
SATISFACTORY SAYS CLEWS

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The momentary situation is eonsidsf
ably better than a month ago. Tax
payments are practically cut of the way.
and new bond issue is not expeetsd
until towards the end Of the year. Pas-
ments for the last Eherty loan win Be
readily met, and the Treasury can aa-
tieipate its wants by treasury netes
thus scattering its demands and aysIE-
ing periodic stringeney.
The treasury is also disposed TO
allow funds to remain in the banks
until wanted; so that By use Of skiIIfnl
direction, financing the war will causa
as little disturbance In the money mar
ket as possible. This week easier cen
6tions prevailed and good borrowers
found little difficulty in securing nec.
essary accommodation. Some additional
relief was felt through resumption Of
gold imports from Canada, where ID IL
understood the Bank of England has
been holding about 52,000,000 for ae-
count Of the federal reserve banks in
settlement Of the foreign loan. About
$50, 100000 of this sum may come TO
New York; the first gold imported for
q considerable period. These facts 90
not mean easy or abundant money; for
capital is going TO be scarce and will
command high rates for a long time tf
come, but they do mean easier condi-
tiOns for some weeks than have pre-
vailed thus far in 1918. In this eonnee.
tion, it is interesting to note that tho
British government viii hereafter Dor
row much less in this market, the rea-
son being that hitherto it has financed
its allies and that henceforth their re-
quests for aid are more likely TO be
made directly to the United States in
stead of through or upon Great Britain.
A better investment demand has De.
veloped since money became Less strin-
gent. Quite number of new issues are
now appearing. AS these must have had
the approval Of the authorities, they
show that government restraint upon
investments has been temporarily modi-
fled. Not little uneasiness has been
created by the situation of public utiI-
tiles, which are much in the same po-
ohtAOh 40 tHV l0AAlt1No WIN UtIuIt tuO
government stepped In; that is, they
have been starved by the prolonged hos
tility of public service commissions and
an nfriendly public opinoin. Nota few
light, power and local transportation is
sues are selling at exceedingly low
prices, and dividends Aave often been
imperilled, il not impaired, by the ad.
vance in wages and other expenses,
while charges for service remained i'm
changed. 1t is not unlikely that turn
for the better is ut hand, because the
action Of the federal government in re.
gard to the railroads was a significant
example, and viii no doubt hasten ad.
vances in charges for gas, electricity,
street railway fares, ete., in eompensa-
tion for the increased cost Of doing bGsiI
ness. The national railroads are making
steady progress. Better gross earnings
arc often reported, and net returns arc
guaranteed by tho government. The ad-
ministration has also made liberal prop
aration for necessary improvements aud
equipment, having authorized expendi-
lures Of $946,000,000 during 1918, Of
which $206,000,000 will be for freight
cars $l99,00Q,000 for locomotives, $685.
100000 for bridges, trestles, etc, S3l,-
100000 for rails and trucks, $4,000, 900
for shops, $9S,000,0 900 for yards and sid
ings, $47,000,000 for main tracks, $685.
100000 for passenger cars and $22,000,-
600 for stations, not to speak OF a host
of other outlays. Such vast expenditures
necessitated by prolonged starvation,
mena intense activity in the steel indus
try for many months to come. Railroad
shares have in consequence shown dccid-
led steadiness and not a little strength
at times. The market for industrials has,
however, been somewhat spotty; increas.
ed expenses and heavy taxes having in
not few instances materially affected
diyidend-paying properties. The ques-
tion of taxation Is still a serious prob
lem. One-third Of the cost Of war is APP
parently to be paid out Of taxes and
these are to be doubled. There is gen
eral willingness TO meet this great adj
ditional burden; but there is neyorthe.
less much criticism concerning the in
anu tVuluriVil VI tHC UltDbHV
law; also a fear that unless the new
taxes are judieiousy applied, thsy will
dry up the sources of revenue and new
capital. For some reason there is much
distrust in the competence of congress
to draw up fair and effective measure
and much more confidence is exhibited
in Secretary McAdoo' s proposals, severe
as they seem to be.
In financial circles there has been
distinctly better feeling. This was in
duced by growing conviction Of Ger
man defeat, by the easier money situa-
tion and by further Improvement in tho
crop outlook. This latter applies not
only to cotton and wheat, for which big
yields are probable and record yields
possible; but also to nearly all the cer-
cal crops, which are doing splendidly.
Nature has also been kind to the far
mcrs of Britain and France, SO that our
allies need have little anxiety about
food supplies for the coming year; sit
uation in strong contrast with the en-
emy, whose food supplies are seant aud
have not been augmented as expected
from newly conquered territory. Indus
trial activity is also running at top
speed in all industries related to war
directly Or indirectly. Labor in such in
dustries is well employed and often ro-
ceiving extraordinary wages, which arc
usually freely spent. The only lines in
which there is any shrinkage in de-
lmanda ara the curtailment of non-es-