Daily capital journal. (Salem, Oregon) 1903-1919, 1919-01-30
Veteran Financier Sees, How
ever, Many Signs Of En-
COurageTnent.

New York, Jan. 30.-The financial
community seemed somewhat depress-
ed this week, chiefly owing to a multi
plieity of confusing uncertainties. I'm
satisfactory relations between govern
ment and corporations; adjustment Of
industry to peace basis; continual de-
cline of commodities; unsa tisfactory
labor conditions, and delay in peace
negotiations, all contributed to low
ering of general confidence and a
weakening of security values. Such diff
fieulties are the natural sequences Of a
terrific war, and will require time for
solution. In one form or another they
will be with us for months to come,
and the process of readjustment must
be accomplished step by step. If the
change be orderly and not violent, it
will be a gain to all concerned; for
business could then work upon more
stable foundations, and labor will find
relief in a gradual reduction in the
cost of living.
There has been much delay in start
.ing the Peace Conference, upon which
hangs the future of the civilized world;
but the outlook is for real progress dur
ing the next few weeks, necessary pre-.
liminaries being about completed. An
archy reigns in Russia and seems des-
tined to end only through exhaustion,
unless some solution can be reached
by hearings granted at the peace con
ference. Germany appears to be reach
inn lad ~
election was decided victory for the
Liberals, or midway between the Con-
servatives and Radicals, indicating that
the mass of Germans still believe in
steady progress, backed by strong cen
tralization of government.
Our railroad outlook, while disquiet-
ing, is hardly as bad as feared. The
appointment of Mr. Rines as director
general met with general approval be-
cause of his ability, experience and
high reputation. There is also a belief
that congress viii not act hastily upon
railroad affairs; while the disposition
to give the railroads fair play is grow
ing more in evidence. Moreover, there
is no general desire for public owner.
ship, nor any real demand for extend
ing government operation for another
five years. The true solution of the rail
road problem would be private owner
ship under wise public control, with
due regard to compensating the roads
for losses incurred by their seizure for
war purposes. We are establishing a
big merchant marine; but conditions
are chaotic in this industry, and neith-
er builders nor owners can adopt any
safe or permanent policy as long as the
government continues its present threat
ening building operations No govern
ment ever made such a colossal failure
or wasted such immense sums of money
in business enterprise, as in the attempt
to turn out a ready made merchant
marine. Such an attainment is impos-
sible, and the sooner the government
stops this useless waste of a billion
or more, the better for all concerned.
1t is now expected that the next
bond issue will be in April, and the
amount $6,OO0,0O0,000. Public officials
and public opinion are united in recog
nizing that this loan should be floated
upon business methods and not by hys.
terical appeals to sentiment. The lat
ter would not likely be as well reeeiv
ed, now that the war is over; also be-
cause personal incomes have been SER
iously reduced by taxes, smaller pro
fits and the high cost of living. When
the loan is issued Secretary Glass will
have to depend considerably for success
upon financial institutions and wealthy
individuals. Besides it is a foregone
conclusion that more liberal terms will
be offered than in previous loans, in
order to meet conditions of the money
market.
Commodities are on the define. Pro-
gressive merchants believe that the
sooner the country settles down to a
lower and more normal basis, the bet
ter. Cotton, cotton fabrics, wool, wool
ems, hemp, rubber, coffee, sugar, but
ter, eggs, steel copper hardware etc,
are all selling considerably below WEI
prices, and thre ten to go still lower.
The fall naturally causes hesitancy,
since buyers await more setted condi.
tions, but the movement within reason
is wholesome and is surely paving the |
way for renewed activity later on.
Thus far the decline has been mainly |
confined to first hands, retailers refus.
ing to surrender any of their extra
profits until forced by competitive con-
ditions. But they, too must yield to the
law of supply and demand. |
Buying powers of the consumer have
been seriously curtailed, supplies will
soon begin to accumulate and retail |
prices must follow wholesale prices ere
long, thus bringing down the high cost |
of living, which is at bottom of much |
Of the present discomfort.
Food, however, remains excessively |
high, which is difficult of explanation |
in view of general abundance in the
country. Cereal crops were large, but |
prices remain high, partly because Of
government price fixing which had |
set values upon the high level in or
der to stimulate big crops. Now that
the war is over, congress should re- |
peal the law which guaranteed the far !
mer 1926 pre- bushel for wheat; at least
N the spring wheat crop not yet sown.
The price of meats continues high, in
spite of the fact that the namber of |
food animals is almost equal to last
years supply, which was the largest |
on record. 1t is useless to eypee: prices
10 descend TO anything approaching
pre-war levels; because, aside from
government price fixing, the costs of
production, transportation and iissri-
button have been so enhanced by high |
wages as to ms Ike decided reductions |