AMERICA AND THE WAR

Southland Times, Issue 17662, 21 February 1916, Page 7

AMERICA AND THE WAR

GREAT TRADE BOOM. ft We are near the close here, in the United States, of a remarkable year, and, as I *have bad occasion to review the course of trade, finance, ahd industry during tho eleven and a-half months, I venture to point out what it has been (writes the New York correspondent of the Melbourne Argus under date 16th December). The greatest of neutral countries has been very fortunate. If some of our people have seemed to give undue attention to the material rather than to the spiritual, so far as the war and the effect of if are concerned, there is some generosity to their credit, and it must not be forgotten that human nature is not perfect in any part of the world. And it should be said that such prosperity as we have had has not been universal.

The year 1914 was not wjiat may be called a good one for the States. At the close pf it the record showed that reduction of earnings and other causes had cut down the market value of our railroad shares. Not more than 60 per cent, of our great steel industry was employed. The monthly output of pigiron had fallen to about 1,500,000 tons, or a little more than half the normal quantity. Our greatest steel company, the Corporation or Trust, was earning nothing for its common stock, and only one-ninth of tile sum required for, the dividend on its preferred shares. With the largest crop of cotton on record, the price, 7% cents, was below the cost of production. Copper had fallen to 13 cents. But tho grain crops had been large, with the surplus in good demand; our gold pool of 100,000,000 dollars, to ease the requirements of exchange, and our octton pool of 139,000,000d01. for the assistance of growers, had not been needed ,and were soon to be dissolved, and the New York Stock Exchange, closed for nearly five months, was open again. Exports were large and growing.

As we look back now, at the end of 1915, we see that the pigiron output rose steadily, until the record was broken, with 3,125,000 tons, In October; that steel mills are working at the limit of capacity, and rejecting orders, while the average of steel prices has been increased by 32 per cent.; that the great Steel Corporation’s net earnings steadily advanced until they were 38,000,000 dollars in the third quarter, against 12,500,000 dollars in the first, and that a notable increase of railroad traffic in the last three months has caused freight congestion at and near our eastern ports. Cotton’s price has risen to 12 J ,£ cents, and the price of copper to 20 cents. Our grain crops haye been larger than ever, with more than a billion bushels of wheat at the bead of the list. But the price of wheat has been reduced by nearly oncthird.

In the first part of the year the upward movement was slow. The large speculative transactions in the shares of companies engaged on war orders began to excite much comment in April. The sinking of the Lusitania in May, and Mounter’s attempt to assassinate J. P. Morgan, Great Britain’s war order agent here, depressed the market for securities in May. in July, however, the steel industry continued to gain, rising to 87 per cent, of capacity, and speculation in war order companies' shares became furious. Shipments of gold and securities from London were coming in, but they were not sufficient to meet the large and growing obligations for war supplies. It was in September that the Britisli and French Commission, led by the Lord Chief Justice, Baron Reading, came to New York, desiring to arrange for a loan of 1,000,060,000 dollars. Before the end of that month the Anglo-French loan of 500,000,000 dollars was announced, with s rate of 5 per cent., and a term of five years. There was much German-Ameri-can opposition, but a great majority of our people, knowing that the money was to be expended here, realised that support of the loan was required in the interest of our industries and trade. Speculation in war order stocks so Increased the volume of business on the New York Stock Exchange that work bv night, as well as by day, was the rule In brokerage and banking houses, where rooms full of cots for the clerks could be seen. In October the price of Bethlehem Steel common stock, on which no dividend has been paid for nine years, rose to 600. It.had been 46 in January, and had never in the past been more than 52. This company lias had large contracts for guns and ammunition since tiie beginning of the war. The price is now 475. The shares of motor companies leaped upward. Those of one of them, 82 in January, were selling at 558. High prices were reported for the stock of the locomotive, foundry, smelting, car, and copper companies. Steel works were engaged far ahead, and high premiums were offered for early delivery. Congestion of freight for export along our north-eastern coast led several companies to refuse to carry any more to tiie seaboard. Near New York there were 50,000 loaded cars on side tracks, and tiie harbour piers were crowded. At tiie present time tiie condition of general business is good, although the stimulus has been from war orders rather than from improved domestic demand. For tiie year the advance in tiie market value of railroad shares has ranged from 10 to 25 points.

Tiie year’s loans to foreign countries have exceeded 1,000,000,060 dollars. Tins total includes 45,000,000 dollars to tiie Canadian Government, 102,000,000 dollars to eight Canadian provinces and 16 Canadian cities, 11,000,000 dollars to, Latin America, ami comparatively small amounts to Switzerland, Sweden, Norway, and Greece. To the Anglo-French loan of 500,060,000 dollars has been added recently a credit of 50,000,000 dollars. France and Russia are in the list for considerable sums.

While our imports hove been slightly reduced, an extraordinary increase of exports is shown. In the twelve months that ended witli October the loss of 188,000,000 dollars of imports was accompanied by an export gain of 1,177,000,000 dollars, in these months the excess of exports over imports was J ,01!G,.S80.000 dollars. While this great excess lias been due almost wholly to war supplies, the word "supples” includes grain and other food, great quantities of which have been shipped. Horses, mules, automobile trucks, railroad cars, rails, iloth, and many other thing;; must he counted with the ammunition, rides, and cannon. It is this enormous excess on the export side, satisfied by loans and credits, and given a sharp stimulus to nur.prominent manu‘•‘vUtftiicduiitries. --