The sun., 1916-01-04
WARNS COUNTRY OF
FALSE PROSPERITY
National City Bank Points to
Vast Expenditures Which
Have No Economic Value.
COORDINATION Is URGED

Tho National City Bank in its Jan
uary circular continues 70 sound the
note OF warning regarding Fictitious
prosperity" which II struck several
weeks ago. II points out that the nations
Of Europe are wasting their substance
and tlieir men in the great struggle now
going on. and as an illustration OF the
enormous strain under which tho bel
ligerents are Iaboring notes that the ex-
pendlturcs of Great Britain have In
creased from $3.50. 100000 In the firT
year of the war to more than $4,000
OoO, 900 per annum AT the present time.
1t adds that, considering the Interrupt
ton of normal industry and trade and
the vast absorption OF capital. It rs re-
markable that the affairs OF the world
are going on as well AZ they DO.
After comparing the bank statements
OF the great European nations for 1915,
1914 and 1913 and commenting on the
| tremendous quantities of goods which
tho Allies are purchasing In this coun-
| try, which purchases have had much To
do with our suddenly renewed prosperity
| the circular says:
"It is evident that there must be
| something fictitious In u prosperity
which arises from vast expenditures
which have no permanent economic
value and whtch come In part from Q
saved up fund which may Dc eventually
exhausted \ spcndthrift r. not enjoy
| Ing real prosperity while no is disslp pat
ing his Inheritance. We know that th'
countries engaged In the war have all
sold large amounts OF American Scout
| ties and are poorer in capital by havihE
done So Some OF them have borrowed
| extensively IN this country and are the
poorer for these obligations.
| check on PrORrcAs SeOr.
Moreover, heavy losses may be su'
fercd within the belligerent countrie.
without buying or selling abroad Thers
| is an exhaustion of merchandise stocks
| unless they are replenished, and there
is a wearing Out, deterioration and on
solescence of equipment, structures and
every kind OF property unless repair
and rcplacements are made. Moreover
If the savers of capital and owners -;
| property, who are the leaders and o.
ganizers OF industry. pledge their credi'
for the support Of the Governments, ana
| later have to pay most OF the taN"'
| entailed by the war. the effect will b,
the same as the cancellation or large
part Of their advances. and viii leave
| them with less capital for conhuctlht
Industry and for the advancement %
industry than they had before.
therefore, the progress or the worlo
will be slower. not only during the wa
but after the war, because OF the diver.
sion OF capital TO unproductive uses and
the pledge of anticipated income fol
years ahead. The greatest loss by th'
war undoubtedly Is in this check upo'
normal progress, rather than In g.
, retrogradc movement from the positio
occupied by the world when the W
| began"
Referring to the results OF the Eur
pcan war in this country. the circuia
says:
"The war has effected revival OF
industry in the United States and gen
eral opinion the world over hnlds ma
this country will occupy much ''rurC'
position relatively in international trau'
and finance hereafter. Certainly II vii
have bought back "a large share OF tht
securities representing American prop
critics that have been held abroad, an'
! very likely the balance of payments en-
account Of interest and dividends viii J..
IN our favor liut whether this slgnii'
a gain over what our position Won
have been without the war is a d'~ere
: question.