Daily capital journal. (Salem, Oregon) 1903-1919, 1919-05-22

mons urag SLOWLY along, DUt not more
SO than expected. Germany naturally
halks at the terms imposed, which are
reasonable and not immoderato eOnsid-
ering the enc nCrmity Of the crimes com
mitted. Europe appears to be gradual
" settling down. Bolshevism is on the
wane, and after the peace treaty has
been actually signed, return 10 the nor
NAL will progress more rapidly. One OF
the first steps viii be removal of the
embargo against Germany. which must
te an eager buyer of oil, cotton lard
copper, cts. Our imports from Germany
may be small for the simple reason
that Germany has little TO send; utheg
rumors to the contrary Our foreign
trade as a whole will. however, will
receive fresh impetus through the re.
lease of larger tonnage for merean-
tile purposes. even though big por-
tion will be required OF b ringing
home our army. On the other hand
more German ships will be released,
aud the world s shipping is being aug
mented by intensified building in all
parts of the world, the total under con-
struetion now being about 7,796.000
gross tons, of which 5,54l 600 tons are
in the United States and 2,254,000 tons
in the United Kingdom
Rapid Expansion of Exports
The rate at which our foreign COM
mcree is expanding is Indicated by es-
timatcs that we shall have a favorable
trade balance of of $4,000, 100000 for
the fiscal year ending June 30. OF
course Europe cannot pay for this
amount in goods or gold. The debt thus
incurred must be adjusted partly By
ca, dts and partly hv investments
abroad, etc. How far tris 6,bt can be
cuareed H. p cGa Of &c futu pro
lcms. The number cf fyuig. banks
that have opened branches in tiIs coun,
try aud, vice versa, the number OF AM
try and, vice versa, the number Of Am
ericau institutions that have opened
offices abroad is much larger than
commonly supposed and shows the
drift of preparations, Our financial re-
sources, however, are sure to be taxed
to the utmost, for home demands will
be even more insistent and sure to
command first consideration. The only
remedy will he for Europe to stop
fighting and get busy producing those
articles which can be exchanged for
american food and other produce. For
eign trade is simply barter, aud pay
ment in desirable goods is far more
satisfactory than payment in gold Sc
eurities or various forms of eredit.
Solve the Railroad Question
Congress will open Monday and its
most important problem after organlz-
ing win be the railroads. The situation
of this vast intcres; requires immedt-
ate attention. 1t represents about S2O,-
600, ,OO0, 600 of capital aud approximate
w one tenth of our national wealth.
We're it not for the fact that they are
backed by the United States treasury,
our railroads would NE in a bad way,
which is really not the fault of the
railroads themselves or the lack of
freight business. Before the war the
drift was seen and when the stress OF
mobilization was added their break
down was to be expected. The war has
only made their position worse thru
a heavy increase Of expenses, when
raised operating costs to the ruinous
ratio Of almost 93 per cent In the
wear before the war under private
management, gross earnings were Sol
OO0, 900 and net s2l4,0OO.0OO; while this
vear. under government management,
the net was only S93,60O,OOO, though
gross mounted to 1,l09,000,000 Govern
meut regulation has proved unsueeess
full financially; while railroad eitl-
CHENEY fell TO the lowest standards IN
many years, Notwithstanding largely
increased rates. Added TO this is the
nbvsical deterioration of the roads, ag'
aravatcd by war, which will caii 1oi
heavy outlaws in repairs. Congress may
take carly action in restoring the roads
to their owners, which according 10
promise the government must do IN as
good condition as when taken over
The railroads will in due season he
NUT on their feet aud their general stat
MS strengthened The lesson has elcse
bearng upon our efforts to bring othet
publie utilities such as wire service
trolevs. lighting companies, etc. I'M
der public ownership It has been prov
cd yerv effectually that private, enter
nrise. with all its faults, gives better
and cheaper service than the govern
ment. which almost invariably eompclS
the taxpaver TO pay the losses.
Taxation and the Money MarRus
The problem Of taxation VIII again
be forced upon congress GoVernmeh'
sxnrpses and losses frohs war are prov
ing far more than expected. The treas,
49,, s tbreated with outlays almost II
moi ouitc as heavy as for the year l9st
elosing The victory loan is practleally
spent. and as no more loans are 70 oe
ssned. the treasury can only meet l's
forthcoming obligations by pefsls''"'
short term borrowing and heavy taNa'
t;on There is no prospect of alleNi-
s,;r, the latter. unless the government
enforces drastic economies, OF whiea ~
shows no evidence. Private economy isI
equally necessary, but OF tha,, wv
there are few signs. For months 10
enme therefore, the government Viii
remain as ID has been, the dominant
factor in the money market It's DC
mandS will have to be met. IN the ~
tnre as in the past, by banking instr
tutions. whose resources arc alreauy
evertaxed in this respect. Other ma
tipns are eoming here TO be financed.
Al the same time provision has 70 De
made for cur foreign trade, when isI
sure 10 expand. SO. ZOO, viii our domes-
~ trade; and added 20 this Is the i'm