The Washington herald., 1917-07-30

Frank A. Vande lip voiced a thought
which has frequt ntly been expressed
in private. when he stalled that buSi-
ness in the Cnit,d S,at,s is now at
top speed and 10 likely TO continue
these activities for some years afteI
the ose of the wdr in Europe. TheI c
are many asons Givth by some of
those who are competent to speak
for Mr.. Vanderlip's view, although he,
himself. has not set forth any rea-
son for his opinion, excepting one
stated in very general terms. Bust
ness prosperity is to be continued
and to be highly inflated. but not
dangerously inflated. for a long time
after the war is ended. for reasons
that differ frolh those which explain
the excessive business ard railroad
activities which wee carried on for
eight years after the civil war, from
1865 to 1873.
John Sherman. in his autobiography,
states II to be mis- opinion that the
leVival OF business activity in the
North, which followed a period oil
severe depression. crardct eriStic of the
inst two years U' the civil war, was
Lnquestionably stimulated by the is.
suing by the gov crnment OF millions
Of paper mOnCy which contained an
indefinite promise to pay, but also
had the legal tender quality. Vast
areas OF the country had been devas-
lated by the wa: and millions Of men
had turned fro:l their customary vo-
cations to service in the armieS. These
found speedy employment after the
war was ended. and the construction
OF the Union Pacific Railroad, which
was completed four years after the
close of the civil war, greatly slim
ulated other railroad construction.
But this was overdone chiefly because
our money situation was not equal
to the strain which these excessive
activities put upon it, Moreover, we
borrowed a great deal of money in
Europe and were constantly inCreas-
ing our indebtedness chiefly incurred
for the purpose of building railroads
Now we have a banking. fiscal and
monetary system, capable OF meet
ing any conceivable strain that is
put upon 1t. How adequate It is was
set forth in a recent communication
by w. P. G. Harding of the Federal
Reserve Board, who in some detail
explained the manner in which that
system made it possible to float a
loan of s2,0O000O0OO without any
serious disturbance of the money
market. We have now what we did
not possess in the frat decade sue
ceeding the civil war, namely an
abundant supply of gold, and should
the war be continued, our store of
gold is sure to be increased, and in ad-
ditiCn to that which was sent to US
by England. we are presumably to
have a yearly fresh supply from our
own mines of approximately SlOO, 900, :
900.
In addition to these resources we are
TO have payments on accounts of
loans obtained in the United States
by the allies, chiefly England 1t is
inconceivable that any considerable
part Of these loans can be paid until
some years have passed through ex-
ports England and the other allies
send to the United States, for pre-
sumably the nations across the sea
will be compelled to buy in the United
States many commodities with which
to repair the devastation of the war
In the case of Russia and probably
France heavy purchases must be made
here to improve railway systems and
to construct new lines. The balance
OF trade in our favor is likely to
be maintained for some years after
the close of the war. 1t is from this
point of view that the men OF finan-
cial authority look when they say that
the conditions after the war will be
Of kind which will make inevita BILE
the maintenance of business prosper
ity.
From still another point Of view
the observations are taken which
justify the belief that Mr.. Vanderlip
spoke well within the truth when
he recently said that business is
now at top speed and will be main
tained for a good while after the
war closes. For it is observed that
the leaders in the steel industry
are contemplating constant domestic
demands for their products after
the war closes. They are expanding
their plants. The United States
Steel Corporation did not decide to
invest eleven million dollars in ex-
panding the plant OF the Tennessee
Coal and Iron Company at Birming-
ham, Alabama. because the man
ayers OF the corporation believed
that these improvements could be
utilized in meeting war order de-
mands. Instead these managers
contemplate a vast increase in de-
mands for steel commodities in the
markets of the South and also of
Central and South America,
1p addition to this Investment tha