New-York tribune., 1917-06-03

Europcs Experience
In Great Britain the outbreak Of war
caused temporary dislocation of busi-
ress. because it was so unexpected. In
America war has been expected for
some time, and no dislocat.on Of busi-
ness whatever is likely to occur. such
as that which took place in Europe IN
1914 Moreover. cash or short term
nayments are the usual thing in Amer
lea. and consequently there Will not De
the same uncertainty that existed IN
Europe as 10 the effect of the war on
the power of individual firms 20 meet
their pre-war engagements, Tor IN Eu
rome long terms of payment are ordl-
narily granted. As a matter OF tact.
the uneasiness as TO the solyency OF
individual firms in Europe was .quite
unwarranted, for the war has made the
business Of practically every one not
only greater, but more prohtable.
Moreover, the outbreak or war mas
the banking position IN the Onlteu
States exceptionally strong SO strong
indeed. that bankers will be able 10
meet easily any demands that may be
made upon them. Not only are tne
cash reserves of bankers unusually
great. but the creation OF the Feder@I
Reserve banks has given the whole
banking and currency system Of the
country an elasticity and strength thau
il has never hitherto had, and has rem
dered the banking system or the united
States able TO meet exceptional war de-
mands as easily and speedily as they
have been met by the banks Of Europe.
The Banks Part
A nation does not need less banking
accommodation i'm war than m peace
Indeed. il needs great deal more, but
IL requires il for a different purpose
Business men will have no difficulty IN
collecting accounts from their Gus
TONERS, as the government, when VIII
buy on a great scale, Will pay cash Tor
everything DO purchases; and as cash
payments will be the order of the day,
business men will not need much add
tional banking accommodation IN order
20 transact a much larger business. But
bankers will have TO assist in placing
government loans by lending money to
their customers 20 enable them to sub
scribe and to meet ,ne instalments
when due. Further, manufacturers may
need 20 make extensive additions 10
their works, ard bankers loans will be
needed 10 enable these additions to be
made. And, moreover, manufacturers
will need to carry greater stocks Of raw
materials and partly manufactured
goods in order 70 increase their output,
and more banking accommodation Will
be needed TO enable these materials 20
be purchased and carried until they be-
come fully manufactured goods and can
be turned into cash on delivery.
IL is possible, however, that the gov
ernment will see its way 70 supply
part Of the money needed TO provide it
with goods after the first process of
manufacture is completed, and may also
make advances for the purpose of Sc
curing the necessary extension of man
ufacturing plant and machinery with
the least possible delay, but this will
doubtless depend upon circumstances
and on whether or not bankers will be
prepared TO lind sufficient money for
the purpose.
1t is obvious. however, that If the
American nation decides 10 put its
mighty strength into the work it has
undertaken a great deal of banking ac-
commodation will be needed by manu-
facturers. and that this can and will be
readily supplied by American bankers
or by the American government, or by
both working IN cooperation
In brief the partici patton Of the
American people in this world struggle
will bring into play the moral and ma
tcrial resources OF an enlightened ma
tion Of l02.0O0,000 persons possessing
an annual income. at the current level
OF prices and wages. of not far short OF
$4,000 G00,000 year. and possessing n
farming and manufacturing equipment
which will enable the nations produc-
tive power 20 be increased with great
rapid.ty.