The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-05

spect Is that the public may not under
stand how productive private enterprise.
which after all supports populations. must
suffer II unrestrained Roadway Is ac-
corded to political projects Of encroach-
ment upon the fund of capital which
private enterprise needs for the progress
sive exploitation of wealth creating re-
sources Oh the other hand public
extravaGance' has been very largely
reflection of private waste and abuse or
borrowing facilities. The recklessness
with which debt has been incurred by the
people generally Is shown by the statistics
of loans on life insurance policies. In the
last twenty-five years these loans have
risen from Il per cent to more than 10
per cent. Of legal reserves and 1t has be-
come necessary for the insurance COM
panies to take steps to limit this menace
to the protection afforded pollcyholders.
II Ii time fOr both public and private bor-
rowers, either voluntarily or through conn.,
pulsion. to make some kind of sinking
fund provision for the extinction Of cap-
tai debts Easy dependence on refundlng
operations has had It's effect in a mass OF
public and private Indebtedness which has
to be partially repudiated at intervals in
order to enable humanity to stagger along
under its burden Of fixed charges Money
In the credit market is supposed to come
back quickly in order to keep credit liquid.
AT much longer seasons there should be
The circumstances Of the capital market
arc more worth dwelling upon 1T this time
than anything else In the past year or the
prospect for 1914. If conditions are
favorable there will be accomplished in
the next six months both at home and
abroad "a great total of rciinaucing. re-
funding and new financing operations
which II successful will herald the APP
proach Of q new era of trade and indus
trial expansion and of improving values.
The bettcrment which has been effected
In the money market Is OF encouraging
omen for the test. SO also Is the practice
of economy denoted by the contracted and
depressed state OF much general business
which is lssuins in the confession OF no
little commercial Insolvency. Economy
means saving. and when tho economic
worfd begins to save nowadays capital
supplies are rapidly recruited. IL the
financial markets In the course OF the
months Immediately ahead should render
a gratifying account Of themselves when
subjected 10 the test OF new security Of
ferir..s there cauuot he much question
that. granted "A good agricultural season.
the recstablshmcnt OF prosperous activity
can be predicted.
stu Il Is to tho capital markets that
attention must row chiefly u" turned. adj
mittin, the abs1,hn; attraction Of poll
tics as "a potential source of ire n stimulus
to capi;alls;ic confidence, and /; 10 chiefly
to Europe that notice must bc directed FOR
the signs OF economic progress. Further
more, OF all the foreign financial centres
which will have to I've carefully watched II
| is Paris which viii be the focus OF regard.
| The centre of strain has shifted from Bcr-
! lin, where 1t was u year ago. TO Paris,
| where the Bank OF France has maintained
a discount OF per cent ever since Novem-
| ber 1912 II the French Government and
| the Paris bankers are able to regain the
entire confidence OF the French investor
| the long DELAYED financial settlement; of
| tho Ba,kan war vii n" made and the
/ worlds money marhet viii b" freed IRON,
| underlying tension with the liftin; of the
! Partisan embargo ON credit which must
| inevitably follow London. the financial
| capital OF civilization, must in the mean
| time arrange its accounts wEh the newer
| countries, such as Brazil and canada,
where inflated business and speculative
| booms fostered by too easy access 10 the
| central reservoirs OF capital and credit,
have been collapsng and where an eco
| nornic crisis exists or is impending.
Outlook Conscrvativ~ly Optimistic.
| Other features of the past year Offer
| announcement TO the adoption OF con-
tentatively optimistic views respecting the
! American outlook. Evidence OF our oasic
soundness has been given ny our ab,i,ty
TO get along without tn" borrowings
abroad to which We have been accus'
toned, although we have had TO repur'
chase large amount OF our securi'
ties from Europe. our gold exports W
1918 aggregated sso,000.O0o. of which
fully half went to Paris. although the net
balance OF exports for the year was only
= about one-auarter OF the total The do
nestle liquidations OF the past year FOL
lowed lquidating movements in 1911 and
/ 1910, which came after the severe nqul'
/ dation of the panic crisis six years ago
It IL certain that our foreign trade VIII
suffer for while as long as capital II not
purveyed in normal quantity to the newer
| countries. but the foreign trade record Is
! further testimony to our excellent position
When TO the aggregate export balance oi
| about $3.50, 000, 900 shown by our foreign
trade movement In the last two years there
is added the credit giving power of our
gold exports and the additional assistance
furnished Europe by the repurchase OF
American securities II is clear that II the
international reckoning is not in our favor
II IL certainly not much against us.
Crop results In 1918 We're not all that
could be desired. The average yield to the
acre was the lowest OF the last decade en-
cept In 1911. Yet aggregate production
was only about IL per cent below the huge
outturn OF 1912. and. while increased cost
rather than large profit Is represented by
the estimate OF 1880. 100000 placed on
the value OF the tArul prouuctS Oh tnc year,
IL is obvious that the agricultural basis OF
prosperity Ii not altogether lacking. The
chief deficiency was In corn. The wheat
yield was of record size. while the oats
crop and the pick OF cotton ranked among
the three or four best ever gathered.
There was fortunately a large carryover
from the season Of 1912, and II may no
chroniced also that winter wheat has
made a most satisfactory start, although
not much significance attaches 10 its con-
dtiOn at this time.
The facts about trade and industry are
fresh In the minds OF all. There is a state
Of depression to-day which !s not confined
to any one country, but has in each coun-
try had auxiliary causes peculiar TO IT.
self. Tho situation Is sufficiently Illus
trated by the conditions In basic Indus
try typified by the iron and steel markets.
A year ago steel manufacturers had record
aggregates OF untitled orders on their
books. These have been cut In half and
are still falling apparently, although mill
capacity In operation has been reduced
from its practical maximum to about so
per cent. Steel prices have declined about
50 a ton during the year although they
are still not as low as they were In No
vember, 1911. An encouraging symptom OF
the times In the larger number Of confessed
commercial insolvencies This shows that
the business position Is being improved by
tho elimination OF weak elements which
owed their weakness to the past years