New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-10-25
Wednesday, Oct. 81, 1917

ends on Saturday 1t will probably
be found that the banks are carry
ing, directly and indirectly, at least
half of the issue, and possibly more.
That is to say, purchasers Of Liberty
bonds will have availed themselves
Of the bank credits which have been
so freely offered TO an aggregate Of
perhaps two billions. While this is
merely a guess, it is at least sup
ported by good banking opinion and
probably will be found to be rea-
sonably accurate. On the surface,
the figures would seem to suggest
the possibility Of dear money for
some time to come, and yet 1t is
fact that bankers have little fear
Of a money stringency. Probably
there will be none, and for several
reasons. In the first place, the Fed
sral Reserve system is great res
ervoir Of credit which has scarcely
been tapped. The possibilities for
expansion Of credits are almost
limitlesA. Each dollar Of gold re-
serve can be expanded into twenty
dollars Of credit-more II necessary
and there are three billions Of
money gold in the country. Half Of
It is already In the Golfers Of the Re-
serve system and the rest Is rapidly
finding its way into the common pool.
Therefore, since the country seems
to be following a course of financing
the war by imitation, there is no
reason why credit should be dear.
1t would, perhaps, be better if it were
dearer, because that would tend to
keep expansion within bounds. Be
yond this is the fact that the demand
for money is not pressing; first, be-
cause the government Is paying its
huge bills with remarkable prompt
ness, and those who are selling to it
therefore have less need of bank
credits, and, second, because the
volume of ordinary commercial bust
ness is diminishing, and so less credit
is required to finance the turnover.
AS to the bank loans on the Liberty
bonds, it should be remembered that
they are self-liquidating, and in the
case Of the first loan at least were
paid of at a much more rapid rate
than any one had anticipated.
In the current issue Of "The Iron
Age" is a particularly gloomy state
ment of the outlook for steel produc-
ton next year. Steel is the very
backbone Of war making, and maxi
mum production is essential, yet this
conservative trade journal says an
authoritative estimate is that next
years total output will not be over
IS per cent Of last years, and in any
event can hardly exceed that of
last year. The reasons why this
forecast is likely to be realized are
to be found in "the increasing drafts
of labor, the minimum immigration,
the overloaded transportation and
terminal facilities, the fuel scarcity,
and the checks likely in
winter" And, except for the last
named, all of these contributing
causes are due in greater or lesser
degree to shortage of labor. For
that the country must speedily find
a remedy. That remedy is as OBJ
vious as it is drastic. 1t is selective
CONSUMPTION of labor. 1t is true that
people are curtailing consumption OF
luxuries, and even necessaries, anC
thereby saving labor; and if the war
should last long enough, so that
every one in the country should final
ly come TO understand why each one
must consume less in order that
there may be more for war, ther
drastic action would be unnecessary
But time is Of the essence, and it i:
one thing we cannot afford to waste
The government needs steel and cop,
per and wool for war; If it is TO gel
them in sufficient quantities the
labor must be taken from the pro.
iuction Of non-essentials. The way
to do it is by Communicating.