The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-11-01
Conservatism Needed.

Conservatism Needed.
The speech made last night by Mr.. VAN
derlip, in New York, on the outlook for
business in this country, would seem to
be somewhat pessimistic, but it Is really
only a conservative warning to make
haste slowly" Mr.. Vanderlip was assist
ant secretary of the treasury under Nc
Kinleys first administration and Is now
president of the National City bank Of
New York, and has recently returned from
Europe, where he found the statesmen
and f1nanciers contemplating this country
with grave conservatism and anxious
interest In our future" Mr.. Vanderlip
no doubt has been somewhat influenced
by these European students of our Won
derful uplift in worldwide influence and
prosperity during the last few years.
It is we'll known that our persistent
invasion Of Europe, in business way, has
excited no little antagonism toward us,
and continental combinations in trade
against US have been freely discussed dur
ing the last two years. There are many
people in Europe, indeed, who would like
to see an abrupt finale to our prosperity:
|, The figures which Mr.. Vanderlip gives
respecting the decline Of our exports and.
increase Of our imports Of manufactures
during the past fiscal year are veri1able,
but the increase Of imports OF merchan-
disc is no sign of decadence, and the
liquidation of international trade bal
ances is a process continually acting, and
the pulling, down of our own credit bal
ances is due to a considerable extent to
large borrowing Of money abroad by the
banks to meet the demand for funds with
which to float big industrial and other
enterprises :,
There is certainly great need for con-
servatism on the part of American bank
ers in loaning funds for syndicate uses
and stock speculation, the latter being
the chief cause Of the stringency of the
money market in New York, during the
past three months, which Secretary Shaw
has sought to remove by various devices
within his power, including permission to
the banks to expand their loans and de-
posits even If the required % per cent OF
reserve against deposits is reduced below
the limit fractionally. -.
I Mr.. Vanderlip mentions one objection
able feature in the situation in the ex-
pansion Of 81 SOC, 900, 900 In national banks
during the last three years, while the
basis of gold and legal tenders back Of
this large amount is little smaller than
1t was at the beginning Of the period, and
deposits Of other banks and trust COM
panies have increased about SO, 900, 900, 900
without increase in their gold and legal
tender reserve. He thinks too much cap
ital has been put into fixed forms Of in
yestment and It is inferable that there
is an approach to the exhaustion of the
surplus capital indicated, indeed, by the
large Indebtedness Of American. bankers
to European bankers. There Is, however,
no cause for alarm in this, for the coun-
try is abundantly able to meet all its T. =
leigh obligations, and this years crop Will
Eeffect such liquidation. Mr.. Vanderlip adj
mits our strong advantages over our Eu :
ropean competitors, and he would only
have "a judicious recognition Of the re-
stricting conditions now visible In our
financial situation" In this period of the
forming of new enterprises, bankers
should be discriminating as to their quail
ty and not feed the reckless speculative
spirit. The country is in most pros
porous condition, and there may be no
doubt on this point so long as the iron
and steel business is in its present state
Of activity, the demand for iron being SO
strong that large orders have had to be
Ifilled in Europe. +.s5zsts
i In contrast, the London Board Of Trade
reports that hard times are imminent in
England; there Is an oversupply OF labor
land greatly diminished demand for Brit
ist manufactures, and wages have de-
clined; shipbuilding is inactive and the
iron trade Is restricted by foreign compe-
tition. In Germany there is great de-
preston in the iron market and iron
stocks are burdensome and offered at un-
lremunerative figures. ID 90
r We have reason to be thankful over oul
; own advantages and to keep cool business
heads. j. 49, - @&s5Ss