New Britain herald., 1917-07-28
Henry Ckeu's
Weekly Letter

New York July 28, 1917.-War
| finance rules the business world to-
i day with a grip of steel. Secretary
McAdoo has just surprised the coun-
try by asking for an additional $5,-
OOO,OOO,O0O to carry on the war, MAX
| ing when granted an authorization of
$12,OOO.OOO $1,000 since our entry into
the struggle. Such colossal sums are
difficult of comprehension, but some
idea may be gained by the fact that
it is more than all the farms in the
United States can produce within a
year; is nearly four times the value
of our mineral products, and about
$4,000, 100000 in excess Of the banner
year in our foreign trade. Nor is
this ALL A 100000 budget is
possible for the next twelve months
to provide for necessary OUTLAWS. OF
course the United States will not it
self spend all this hugh sum. A large
portion will be- loaned to our allies,
so that the full amount will not repre-
sent actual costs of the war to the
United States. We have recently
loaned about $1,50O,0O0,00O to Great
Britain and must shortly loan still
larger sums, the bulk of which will
bespent here for military purposes.
These latter loans will be an asset, so
far as we are concerned, and not
liability. Such a magnificent display
OF financial power should hearten our
allies and open the eyes of our ad-
versaries to the stubborn fact that
they are engaged in a war of self
destruction, bli1ldly hurting them
selves against the impossible. Our
own administration has certainly
done wisely by acting with all posi-
BILE vigor and utilizing our immense
resources of men, munitions and
money for the scales for the allies
without stint. The latest advices
from the seat of war have been dis
couraging, the setback and disaffec-
ton in Russia being particularly I'M
settling. Anarchy prevails for the
time being. Nevertheless, such re-
verses must be expected. Russia is
country imperfectly understood,
and always furnishing surprises. In
any event, it is premature to believe
that Russia will not ultimately pull
herself together and do her share in
the world struggle. Her making
peace with Germany at this time
seems incredible.
General business in the United
States is active in many lines and con-
ditiOns are sound. Crop reports con-
tinue to be more and more encourage
ing; while industry with few excep-
tons is working under continued high
pressure. There is little or no inf1a-
ton of credit our banking situation be-
ing highly satisfactory and quite equal
to the strain imposed by war. In COM
modities, however, there is more or
less imitation, directly traceable to the
war which unavoidably increases cost
Of production and fosters high prices
How far Government Intervention will
be able to stop imitation of commodi-
ties, remains to be seen. Great Brit !
ain began experiments in this direc- |
ton long in advance of the United |
States, and despite all efforts to the 4
contrary, the law Of supply and de- |
mand exerted its sway more or less eff |
fectively. Thus far, Government con- !
troll has been most effectual when |
confined to enforcing laws against in
furious speculation Or monopoly and |
aimed at securing more efficiency and
less waste. The British Government
had but Indifferent success in price
fixing, but proved that Government
can mitigate though not prevent high |
prices, which ultimately bring their
own corrective automatically through
increased production and restricted
The fixed price idea is
a simple minded dream, utterly i'm
practicable where basic conditions
fuctuate daily and are different in
every locality If it were feasible to |
esta hlish a system of fixed prices, all
sorts of evasion would be quickly mi
tiated, and bargains would be made to
I, 4
special terms of sale, altering weights
and sizes of packages, special credits,
etc. In another direction Great Brit
ain also had Indifferent success and
that is in the regulation of transport
tation. British shipping is now regu-
lated to almost the last detail as to
ports, cargoes sailings, freight rates, !
passenger rates, etc. Fortunately the
United States is getting at many of |
these results more effectually and with
less friction by means of united CO.
operation on the part of leading in
lustrial concerns with the United |
States Government.
For the time being, business is much
hampered by delay in new legislation.
The country awaits settlement of the
revenue bill, the food bill and several
other war measures of Importance. |
When these are settled activity will in
all probability be resumed, and mer-
chants and manufa cturers will be free
to take contracts ahead. 1t goes
without saying that certain industries
will be immensely stimulated by war
Congress has authorized
s64O, 100000 for aeroplanes, $5OO,OOO,-
900 for shipbuilding and another
800, 100000 for the navy. Immense
xxin hn fn, oot lie |