New Britain herald., 1915-08-21
FACING FUTURE WITH
 EXCESS OF OPTIMISM
Bankers Of ]. s. Warned of Chief
 Danger By Henry CleWs
Especial to the Herald

realized that this threatened a fresh and dangerous crisis in our relations with Germany.
 In one form or another, the war continues to dominates financial af- fairs here. Although we have suc- ceeded in being strictly neutral in our actions, our foreign and domestic trade, our foreign exchange and secur- itv markets as well as our banking arrangements have all been deranged more seriously and more fundament- ally than at any time since the Civil war-if not even more than during that great crisis If the disorganiza- ton has been extra ordinary, so, too, have been the energy and ability with which it has been met and overcome This country has exhibited industrial strength and financial capacity far be- yond all expectations. The conse- quence is we are facing future in which the chief danger lies in an ex- cess of optimism. We are far more likely to suffer from too much activ- ity, too much confidence and too much speculation than too little. Evi- dently we are liable to run into a period of excessive imitation, the dan
 
 nized by those who control our bank ing system. We are now the only firstclass mmercial power whose re- sources are not being wasted by war, and, while all other great trading and industrial nations are rushing madly into losses which it will require years to overcome, and some of which never will be recovered, the United States is steadily augmenting it's resources and preparing itself for new era of ex- pansion in both domestic and foreign trade. When the war is over, it will be found nations will have vastly changed. Germany will require years for recuperatiOn. So, too, will Bel gium and parts of France. Russia and Italy may feel the consequence less seriously than the countries just mentioned, while Great Britain will feel the injuries least of all the bellig- erents. But the United States re- mains the only great power in the world that will or ever can, benefit from this tragic struggle. In esti- mating our business future this the central fact that should not be for gotten.
 Foreign Exchange Upset.
 Attention in financial circles has once more been concentrated on for eign exchange. Sterling dropped to 4:64, the lowest on record. This means shrinkage of nearly 5 per cent, in sterling exchange, compared with about IT per cent in French ex change, about 12 per cent in German exchange and 25 per cent. in Italian. The decllne Tn sterling would have gone still further had it not been made known that the British govern ment was taking active steps for pro- tecting it's credit in this market The situation in exchange was rapidly be- coming more acute by Knowledge that the time was approaching when the excess of exports over imports, which is at the bottom of the present eX- change crisis, would become still more formidable. Some stable settle ment of Europes dept to the United States is imperative. Our creditors may talk about sending US another 25O to 300 millions Of gold, but they can poorly spare it and we do not want it, our present stock being so huge as to be embarrassing, if not posi- lively dangerous as an inf1ationary element To us such a proposal does not seem in line with good finance. It would seem as if the only practical way of adjustment was the selling of British short term notes or bonds in the United States. British holders cannot be induced to part with any further important amounts of Ameri- can securities. Efforts to raise loans in this country by pledging British fo unsuccessful; nor have any of many other attempts, to re-esta blish Brit ish credit offered much promise. The simplest and in some respects the best plan is for Great Britain to place a short term note or bond issue on this side. Should the rate or condi- tions be made satisfactory, there is little doubt the loan would be taken Capital is accommodating here and new home obligations have been compara- lively limited. In view, however, of the good rates which capital is likely to command in this country, special inducements must be made by the British government. If such a loan succeeds, others are sure to follow. The announcement of some such plan as this may come at any time and would be a distinct relief in the eX- change situation.
 War Stocks Active
 Activity in the war stocks continues with wide fluctuations Many of these stocks have already scored re- markablc advances in spite of per- sstent profit taking. The steel is sues have been especially conspicu- ous for strength. Much of their rise has been legitimate because the in dustry has risen from 'pauper to prince' in a few short months. Near ly all the leading steel plants are run ming to nearly their full capacity and