The Washington times., 1916-06-04
Optimism, But Caution,
Attitude of Business
Men of Large Affairs Look to Future With Conf
dence, But 1t Is Realized Conditions Are
traordinary.

"Optimism with caution In the term
used by O member of q big New York
banking house In referring to the pres
emit condition of business throughout
tho United States.
While In practically every big busi-
ness activity in the c,untry there Is an
abundance of optimism and feeling
Of confidence In the future, 1t Ia evident
that the whole country Is doing busi-
ness with a knowledge that conditions
are extraordinary and subject to
change
overstocking to forestall n further rise
in prices, are inclined now to proceed
more cautiously, bankers have hecoWe
more discriminating, and manufacturers
are protecting themselves against con-
tingencies with more than ordinary con-
servatism. This condition. taken as q
whole, IL regarded as healthy and
promises a continuation of industrial
activity along sane. conservative lines.
Prices Are High
Agricultural products and mineral
products never before brought prices
that were so remuneretive to tho pro-
ducers, and the number of people d.
rectly engaged in these industries Ia
very large. The lumber industry also
is reported as prosperous. although not
to the extraordinary degree enjoyed by
agriculture and mining.
Manufacturing In practically all lines
Is working up to the limit Of the avail
continues to run along at top-notch
speed, end orders are said to be booked
ahead to insure continuation OF this
pace for at least another twelve-month
Building operations on n large scale
are doubtless restricted by the high
cost of materials and labor. but there
has been enough work of an emergency
character. to provide general employ
ment In the building trades.
Business conditions are exceptionally
satisfactory In many respects, and much
more so than stock market movements
indicate" says Henry Clews & Co.
There Is some disposition to hesitate,
owing to high prices. war and political
uncertainties. also to closer scrutiny
Of credit. but this tendency has not thus
far become sufficiently pronounced to
induce more than a partial slowing
down of activity. which. taking all
things into consideration. was somewhat
desirable.
1.-THE stock market Is laboring under
several adverse conditions. and unable
therefore to reflect the favorable busi-
ness conditions referred to above Chief
Of these obstacles are the Presidential
campaign, the war, our relations with
Mexico. the influx of securities from
abroad. and a somewhat closer money
market. The political campaign Is real
ly less exciting than usual and seems
to be one of men rather than OF Issues"
Bank Exchanges Show Activity.
Evidence of activity in general busi-
ness now prevailing Is shown by the
enormous volume OF bank exchanges
during May at practically all the lead
ing cities in the United states. the total
according to a statement prepared by
Dun's Review. which includes returns
from 131 centers. amounting to $2o.4i5.-
769.417.
This is an increase OF 4o5 per cent
as compared with the same month last
year. and a so per cent increase over the
the speculative markets helped to
Swell bank clearings at New York city.
the total at that center being 453 per
cent larger than last year. and III
Der cent In excess of two years ago, but
in the main these gains are attributable
10 the remarkable volume of operations
in ordinary business channels.
For the four months of this calendar
year ending with April. the exports OF the
United States exceeded imports by the
tum OF S73S. 607. 1884, This rate, II main
aimed throughout the year. would give
an excess in 1916 OF about $500. 900. 900
greater than that of 1915. The question
of how settlement of this vast ACQUIRING
balance Is TO De maze remains as inter-
esting as ever.
The expenditures of American tourists
in Europe are no greater than last year,
and the payments by this country on
account of dividends and interest are
considerably smaller than last year. for
not only have many American securities
been returned to this country. but there
are important offsets of the same kind
as a result Of the foreign loans made
here during the last year.
New System Approved.
Strong Endorsement of the par check
collection system about to be put In
force by the Federal Reserve Board is
given by the National City Bank Of New
York In It's June circular. 1t says the
movement strives for a condition which
has long been desired by the community
and urges the smaller banks. which
have been receiving a certain income
in the past from exchange charges, to
make the necessary sacrlnce Tor the
benefit of the whole banking system.
THE regulation will put into effect
a simple and direct clearing system be-
tween the banks included in the Fed
eral Reserve SYSTEM says the circular,
land do away with exchange charges
between these banks.
ut also does away with the practice
of counting checks In the malls as re-
serve 1t cannot be questioned that
these are improvements In banking prac-
tice, but the old practices have beer
long established, the banking business
has developed under them and Is ad.
justed to them, and the changes will
seriously affect the earnings OF many
of the smaller banks.
"It should be said, however, that a
great many banks of the same class as
those which object to the regulation
do not object to It, but approve OF II
as sound policy.
II Is convenience appreciated ny the
public, and as such n most Influential
factor In the development OF the bank
ing business. 1t Is good banking serv'
ice to facilitate its use, and for the
banks to cooperate with each other In
a systematic manner to that end. They
have not been able to do so In the past
and never will be able to do so without
having the terms regulated by some
common authority.
1T will hardly be questioned that re-
luctance to give up the charge upon
banks own checks is chiefly due to the
fact that II Is a charge paid by g
stranger instead of by n customer, anC
this very fact makes the practice sub
ject to abuse.
Large Purpose of Act.
1.-THE Federal reserve act was de
signed for large purpose, to wit. t.
bring the banking units of the country
into an organization which would b,