Daily capital journal. (Salem, Oregon) 1903-1919, 1919-01-23
Extravaganza OF National Ex.
penditures Must OF Neces-
sity Be Curbed Now.

New York, Jan. 23 Before long tht
new loan will have to be placed tn,
proceeds of the previous loan having
been exhausted some weeks ago and tn,
| government now being entirely depend
ent upon treasury certificates. Condi
tions affecting floatation of govern
ment issues have so radically changed
that methods different from those OF
previous loans will have to be adopt
ed. The war spirit, very importan'
factor in other loan drives, has sub.
sided, and former appeals to patriotism
by means of hurricane methods would
not now be effectual, especially in view
of the decline in all Liberty issues, ex-
eept the 315s. The next loan must de-
pend more upon a high sense of pub
| lie spirit, upon intelligent self-inter.
ests and upon meeting financial con-
ditions upon a business-like basis. 1t
has been inferred from the remarks of
Secretary Glass, who seems to have a
sound grasp of the situation, that the
coming loan will have to pay Az to
per cent TO secure the necessary funds.
Money, like other articles and services,
will unavoidably command what it is
worth or go elsewhere. Capital is
scarce and dear, hence the fall in price
of nearly all our government issues
,, With conditions as they are, a short
term treasury note, say about three
years, bearing from 4c to per cent
would undoubtedly be successful; for
financial institutions would readily take
large blocks, and such an offer would
undoubtedly bring out an immense in
vestment demand. There is no doubt
that such loan could be easily financ-
ed, and the country could secure the
necessary funds more easily, and with
less disturbance and cost than by the
boisterous and expensive methods so
necessary during the war.
In this connection there is another
matter which requires serious attention,
and that is the extravagant national
expenditures. No complaints in this di-
reetion were heard during the war
but now that peace is restored there
should be vigorous retrenchment in all
departments at Washington. Many un-
necessary bureaus are endeavoring to
make themselves permanent; many con-
structive works that should be stopped
are still going, while hundreds Of mil
lions, if not billions, could be saved dur
ing the current year if there was only
sufficient effort in that direction. The
government has done much toward such
economy, but not enough, mainly be-
cause public opinion has not yet been
sufficiently aroused to make itself felt.
The conflicting outlook of bust
ness induces generally conservative
temper. Deflation-is the prevailing ten
dency; for commodity prices are too
high to permit further expansion and
the widespread conviction that prices
must recede naturally checks buying In
consequence, the present volume of bust
ness is probably below actual require
ments, though when values become
more settled on lower basis there is
no doubt of renewed activity. The de-
cline seems to be resisted by the stub |
born facts that many raw materials
are scarce, that the output. of mines and
mills is often curtailed because peace
orders have not vet filled the place Of
war orders. and wage adjustments are
impossible before a reduction in the
cost of living Some very significan
reductions have occurred in the textile
markets, both cottons and woolens be-
mo weak. Several of the most staple
brands of cotton goods were reduced 25
10 30 per cent this week, the deepest
,ut on record. That such sensational
reductions should be made by the most
business houses in the
trade meant that in their Judgment
lraslic action was the surest way of
yetting back to normal. In these cases
war profits were entirely eliminated,
md prices cut clean to the pone. If
'urther cuts are necessary they cannot
10 had without cheaper cotton. lower
wages or a shutdown. Which of these
will be necessary is be-
yond the knowledge Of even experts.
That commodities are experiencing
worldwide reaction is shown by the
london 1Economist" index number,
which stood at 6094 at the end Of De-
ember. a drop of 11S points in the
month and the lowest figure since