The Washington herald., 1915-01-04
MERCHANTS, MANUFACTURERS AND
BANKERS, THE COUNTRY OVER,
VIEW FUTURE WITH CONFIDENCE

provement Credits do not seem un-
duly extended and money is in free
supply. The war abroad is still the
important factor, and is discOncertinc
to business. The assurance from Wash
ington that business can now proceed
unmOlested is pleasing. but il has in
the past been so ruthlessly attacked
that large corporations are still skcpti-
cal.
The most important interest in this
country, namely the railways, are hard
pressed by increased costs and taxes.
with diminished income. The late in
crease allowed will help some, but 1t
remains to be seen il this is not mOrr
than offset by increased demands upon
them.
On the whole. the outlook for the
coming year is far from discouraginG
and yet we have had years of NOR"
promise.
Adjustment VIII BE Slow.
George J. Seay. governor of the Rich
mond reserve bank. says adjustment L.
reforms will be slow:
In my opinion the improvement ON
financial conditions may be expected to
continue throughout 1915.
There is no question that the estab-
hshment of the Federal reserve system
has given a new stability to the cOmmSr-
cial credit situation. and this influCnc,
will continue to be felt.
1t would bs unreasonable to expect
more than gradual and moderate inn
prOvemeni in the industrial situation.
which always follows, although i'm
many cases very slowly, upon improved
financial conditions
Although the statement is not new, Il
is nevertheless a fact, and there is en-
couragement in it. that the country has
stood with an amazing degree OF stcadi-
ness the disturbance OF international and
domestic financial relations and the dis
ruption Of markets arising out Of the
European war. situation.
This has not been done. however,
without extensive and unusual indul-
gence of debtors, and there is much
liquidation to be accomplished.
The extraordinary disturbance occa-
stoned by the war. coming upon the
naturally restrictive influence of the
various legislative reforms undertaken
within the last few years, which. what
ever their ultimate effect upon the
economic situation, inevitably produce
period of retarded progress. con-
struCtion. and development. has caused
a condition from which we will emerge
slowly. and we might as well recognize
the fact.
1t is also not to be overlooked in
this connection that we have lost many
notable leaders in finance and COM
merce within a few years.
The difficulty of obtaining capital At
normal rates for large constructive en-
teTprises will be very greatly increased
by the absorption of capital, either for
continuance of the war or rehabilitation
should the war come to an early ter
mination.
There is very probably liquidation Of
investments from abroad as well as at
home to be faced, because of necessity.
The wealth Of this country accumU-
lates so rapidly, however, when the peO-
pie begin Ito wear their old clothes,
that our recovery is often more rapid
than can be fOreseen.
1t is essential to either early or COM
plete recovery that the credit Of the
railroads of the country should be fully
restored, and the recent addition to their
income from increase in freight rates is
but the first step toward that end
The problem Of the railroads is the
most serious question confronting the
country today, from a commercial stanC-
point of the following plain reasons:
First-The largest body of labor in the
country is affected by the poverty Of
the railroads and their allied industries
Second-Impaired value of securities
and threatened incomes affect nearly
every investment institution in the COUn-
try, as well as hundreds of thousands OF
individuals who furnish capital for new
enterprise.
Third-Low prices Of securities affect
the basis of credit.
Fourth-Reduced incomes affect Sc
riously the power of reinvestment
Fifth-We shall be poorly prepared C."
handle prosperity when it comes with
out adequate preparation for transpor-
tatiOn.
Can Withstand Depression.
Joseph A. McCord. governor of the At
lanta reserve bank, says trade is re-
viving:
In my opinion the present business con-
dition is much improved over the last
three or four months. The sale Of mer-
Chandise, of course. has been very much
curtailed as compared with previous
years, not only from the stagnatiOn
caused by the European war. but on ac-
count of the low price Of cotton. The
farmers have not the ready money To
spend: besides, they are holding quite a
good portion Of the crop. Naturally
economy Is being praCtiCed.
No part Of the United States can stanG
depression better than the South. The
South buys manufactured goods from
other sections and sells crude products.
and in their economy they find enough
clothes and wares to tide them over to
better conditions. In this the people are
materially aided by climatic conditions.
One Of the greatest factors in bring
ing about better conditions was the open
ing of the Federal reserve banks on No
vember Is. Up to that date there had
been no basis of credits or values. Money
was ruling at high rates of interest even
in the Central reserve cities. in New
York at s per cent to per cent, and was
in good demand at these rates. The
opening Of the reserve banks stabilized
values and released gold reserves. Rates
of interest declined and trade conditions
are taking new life and gradual improve
ment is apparent. Cotton mills are buy
ing cotton freely and running on full
time, cotton is moving freely. consider
able export trade arising from this as
well as other sources. There is some
demand for export Of phosphate and
naval stores, and other industries are
resuming.
The railroads report improved traf-
fc and are giving employment to men
who have been idle since August.
The building trades have been dor
mant. but there is considerable inquiry
looking to new building operations un-
der the influence OF cheap material
and reduced wages. I look for an i'm
provement after the first of the year.
The farmers will begin planning for
next years crop. and naturally will be
gin to sell their holdings of cotton.
which will materially help financially
and in the revival of trade. The farm
ers are planting more oats. corn. and
wheat than before. The production OF