Daily capital journal. (Salem, Oregon) 1903-1919, 1918-05-16
Henry Clews Finds Monetary
Strains of Bond FlOtatiOn
Safely Passed

gests preparations for a renewed drive
by the enemy against the allies. The
fact that this has not occurred earlier
is proof Of the exhaustion which fol-
lowed the previous drive, as well as the
difficulties to be overcome in carrying
out the original objective of the German
forces. One thing is quite certain and
that is, that in spite of ground lost by
the Allies in the Somme district, their
morale has not been impaired but has
on the contrary steadily risen. while
that of the Germans has as steadily
fallen. This result is attributable to the
terrific price in lives paid by the Ger.
mans, and to disappointment at their
failure to overcome allied resistance.
Germany is conscious that the chances
Of winning this war are rapidly fading
now that American troops are going
across in ever increasing numbers. Sec
rotary Baker made the significant adj
mission that more than half a million
American soldiers are now in France
ana there is reason for believing that
during 1918 we are likely to have fully
a million over there. German leaders
refuse to admit their doom is sealed,
and in bitterness of spirit they prefer
to wreck everything within reach rath-
er than submit to the inevitable. The
longer Germany prolongs the war the
more severe and permanent the self-in-
.tnCted disaster will prove. Germany 8
rulers brought down upon their coun-
try the bitterest hatred ever conceiv-
ed. 1t was made in Germany, and Ger
many must suffer the penalty of its
crime.
Inc extraordinary success of the
Third Liberty Loan should impress upon
the enemy the utter hopelessness of
carrying on the war. We raised in a few
short weeks nearly $4,000, 900, 900 in
money contributed by 100000 or
more subscribers. The enthusiasm dis
played in taking the loan far exceeded
all expectations, and must be interpret
ed as a remarkable demonstration of
American earnestness and unity in the
determination to carry on the war to
q successful conclusion. If the German
people really understood the mind Of the
allies, this would would quickly end.
The high tide Of monetary strain III
cident to the huge loan and extraor-
binary tax payments has been safely
passed. Such enormous transactions in
so short q period of time have never
been attempted before in the world IS
history, yet the whole operation was
successfully accomplished with scarcely
q ripple in the financial district. From
now on the money market should be
letter able to take care of itself and
funds should he less stringent until pre-
~parations are in order for the next loan
iu the Autumn. At present the war is
costing at the rata of approximately
e40, 000, 0O0fa day, and this rate of ex-
pcnditure is likely to keep up indefin-
itely. We are still lending large sums
TO the allies; the cost Of the war tends
to increase rather than diminish, and
additional sums will be required for the
shipbuilding drive, since without ships
and more ships the war cannot be sue
cessfully prosecuted.
Industrial activity is being turned
more and more to war essentials, the
steel trade naturally coming first. With
out steel in abundance, and coal also
we could not win the war, because it
would be impossible to provide the
necessary ships and munitions without
these primary materials, and without
them men and money alone would be
useless. Of food We have an abundance
for ourselves and plenty to spare for our
allies. The latest crop report suggests
a possible wheat crop of 1000, 000, 900
bushels. The rye crop will also be a
record one. Our farmers are unques-
tionably working s%trenuously to cult
vate every acre, and secure the largest
possible yield.
In financial circles q mach more hope
ful spirit prevails. This is based prim-
ally on the growing conviction of ul-
Innate German defeat. Along with the
enthusiasm created by a successful loan
campaign, courage has risen and OPP
timism is running stronger than at any
tine since the war. The spirit of dog
ged resistance to unfavorable factors
is growing. Our people are looking far
ahead to the era of progress which is
bound to come after the war. In the
face of such expectations, minor diff
do not count. So far as immed-
late affairs are concerned, the situation
Is favorable. Business activity is gen
.ral, and bank elearings again show
over the previous year. Under
such stimulating influences the security
showed growing activity. The
steel issues naturally responded most
readily, U. S. Steel showing o rise of
several points, while the smaller con
terms benefited correspondiagly. Large
oioers placed for rolling stock, engines
aud cars, stimulated interest in the Sc
e~ulities affected, and more attention
given to the railroads which are
uuder shelter of the government
umbrella. There is no longer doubt about
recent dividend rates being maintained,
and earnings are already recovering UNI
der the restoration of traffic to more
normal conditions. Heavy increases in
wages are in prospect, costing between
5000, 100000 and $3O0,o OO, 900, and to
meet these increased outlays the govern
ment is likely to advance rates at an
date about 20 to so per cent. Thus
far the government has cleared up the
congestion which broke down transpor-
tation last winter; has planned for i'm,
mediate rolling stock; has proposed an
increase in wages, and is contemplating
an advance in rates. WKen ii eompletesl