New Britain herald. [microfilm reel] (New Britain, Conn.) 1890-1976, 1916-12-30

Europe, where social political and
geographical conditions are so differ
ent from the United States, are no
criterion for us, particularly as none
OF them approach American roads in
efficiency, low rates comfort.
Perplcxing Business Situation.
War imitation has carried prices of
comm ODDITIES to unprecedented levels.
1t is somewhat hazardous to assume
that this imitation has reached it's
limit. Still higher prices may be
reached, and if so the adjustment
following later on will be all the more
severe. Suffice it to say that for the
average business man the future is
full of extraordinary perplexities for
which there is no parallel asd through
which no sure trail can be easily
blazed. Caution and conserva-
tism must be the guiding
policy in all industrial and tinan~
cial activities for the next two years.
This does not mean an early ending
of present prosperity; on the con-
trary, home conditions are so salts
ia Glory in many respects that under
skilful guidance such prosperity may
continue indefinitely with slight in
terruption. One source Of confidence
is the banking situation in the United
States, which is exceptionally sound.
Comptroller Williams tells us that
the growth of national bank resources
last two years was three times greater
than any other two year period, and
that the gain in resources was So
900, 100000 There was no monetary
imitation and no dangerous expansion
of credit. Our Federal reserve sys-
tenn is working very satisfactorily
and possesses banking power which
will prove highly advantageous in
event Of crisis. The policy Of the
reserve board in seeking to influence
other banks will also prove beneficial,
if wisely exercised; and the dis
coura cement recently given to Amer
lean investment in British treasury
notes, though rather aWkwardly done,
struck a prudent and necessary note
of caution. The action of the Fed
eral Reserve Board also in making
connections with the Bank of Eng
land is another step of great signi-
ficance and importance. 1t is tangi-
BILE proof that the United States has
gained a new position as a world fin
ancial power, and that while London
may recover it's former prestige, New
York has advanced in rank as a
banking power more than any other
city in the world as a result Of the
war. 1t will also greatly facilitate
business between New York and Lon
don; render less necessary the clumsy
eXpedient of shipping gold and tend
to make New York the central re
serve institutions of the country, free
of the political. objections to a CEN
trail bank. This country now has an
enormous stock of gold on hand, es-
timated at S2.700,000. 900 and it will
be easier to protect this supply if
necessary when foreign trade re-
sumes it's normal flow; that is when
imports rise and exports fall to more
natural proportions. Further it will
tend to remove the arritation pro-
voked in London by our refusal to
take more British treasury notes. In
all proba bility similar relations will
be established with the other great
banks of Europe.
Financial Conditions.
The financial outlook for 1917 is
encoura ging, notwithstanding innum-
cradle perplexities arising from the
| war AS peace draws near extensive
readjustm ents will become necessary,
which may induce temporary incon-
venience and loss. 1t can be taken
for granted that the war industrials
will not revel in the big profits of the
past year or SO; increased costs in
wages and raw materials preventing
any such returns fOstered the wild
speculation of 1916. Operations for
the rise in commodities will also be-
come more and more hazardous as
peace draws nigh, for as usual high
prices will lessen consump tion and
stimulate production, not to speak of
the temptation to discount the ap-
proach of peace. 1t is in these di-
rections where future uncertainties
will be greatest. If we differentiate,
the situation and venture into fields
least affected by the war. the pros
poets will be found more assuring.
This is conspicuously true in home
affairs, where there are yet no con"
spicuous indications of the present
wave of prosperity receding. Our
agricultural classes are enjoying eX-
traordinary prosperity owing to high
prices for all farm products which
afford a large margin for deprecia-
ton The same is true Of many in
dustrials not dependent directly or
indirectly upon the war The buying
power of the masses has been great
" enhanced by advances in wages
while extraordinary profits aCcumu-
lated by owners of large mercantile
and industrial plants created huge
reservoir of new capital awaiting in
vestment
In all probability 1917 will witness
the launching Of many fresh ventures
that will keep labor we'll employed,
and scarce also, for no large imm1gra-
ton from Europe can be expected for
some time to come. AS for mercan-
tile distributors, in the majority OF
cases these are carrying light sup
plies, fearing to stock UT at hlgh
prices: and bankers generally have
adopted a cautious policy in grant
mo commercial credits Thus the agri-