The sun., 1918-12-03
CITY BANK FORESEES
GREAT PROSPERITY
Says Readjustment of Business
Should Not Cause
Alarm.
WORLDS STOCKS ARE Low
Demand for Money Will Be
Lcssened by RecessiOns in
Costs and Prices.


mast Is the opinion OF the National City
RAM, as expressed in its monthly letter
,.sued yesterday. The Government, It
saws will require a great deal In its
.s,tlements, but its payments will be in
uouidatlon OF war contracts without re-
nswals OF them. and the recipients, in
stead o. retaining the funds Cor con-
tlnued operations will DO paying off their
obligations In discussing the money
situation the bank says:
"During the past year costs and prices
have been on a rising scale, constantly
absorbing more capital or credit. but
from now on there will be at least mod
crate recessions in both industrial ac-
tivity and the prices OF commodities,
with the result that less bank credit will
be required. Even IL the peace demands
upon industry should be equal to the
most sangune expectations they will not
he so imperative and regardless OF costs
as war business OF necessity has been.
Already there has been an easing Of the
situation.
Offerings OF commercial paper are
lighter. indicating either that operators
are expecting to use less money or that
they are holding of TO see what the de-
yelopHents may he. In this their at
titude is like that of the buyers of mer-
chandise. In view Of the loaned up con-
dtions of the banks and their naturv,
inclination to reduce their rediscounts
mere will have to be a very considerable
degree of liquidation before commercial
rates are much affected"
The bank calls attention to the prob
ability that the banks will have to do
aud even larger proportion of Treasury
financing In the future than they have
IN the past. which will tend to sustain
rates. and points out that the monthly
Offering of $1,000, 00O, 900 to $1,5O0,OOO,-
400 certificates OF Indebtedness, despite
the prompt disbursement of funds, will
tie up that amount of credit until the
governments current obligations are
reduced to a material extent. These
oferngs tighten the money market at
irst but with the appliance OF these
funds in the reduction of private in
leotcdness a relaxation is inevitable.
Recovery From War.
The practical test of this country's
ability to recover from the war and to
enter upon the real basis of property,
IN the opinion OF the bank. is in its
capacity TO produce a flow OF goods for
trade and 20 supply the wants OF the
population. The circular continues:
1T is not a question OF how much
money has been expended on the war or
the size OF the national debt. 1t IL a
question OF production how much
grain. meat, fruits, cotton, wool coal,
oil and factory products are coming 10
the markets. What Is the available
slnount OF machine power? What is the
STATE Of the industrial organization and
what is the banking power? II the
facilities OF production and distribution
are ms great as ever, there is no real
OBSTACLE in the way OF prosperity"
The city Bank declares that the only
doubt as TO the future relates to the
transition period. and that it is the I'M
'ert5inty OF an uuorganiZed situation
which makes IL dangerous. 1t adds
There is one way. however In which
tie Government might contribute effec-
'v'lv to stabilize the situation, and that
IS by providing a programme OF con-
StrEc'ive expenditures upon public works
10 lake the place OF war expenditures
me shift OF labor from public employ
me"t to private employment would thus
''ko place gradually instead OF suddenly.
..' Ief uJusuheHt Noulu ne maze grad
Wall" and the confusion and disturbance
are apprehended would be mini
- and no longer feared
ere is now general scarcity of la
-. me country over, and the wants Of
! ate industry should be supplied az
rapidly as possible by releasing men
fnu the Government operations. In the
'ls. ut enlisted or conscrpted men 1t
might well be A selective rehabilitation,
iiustrated by the release of anthra-
'te coal miners, so that those who do
rot have definite employment in view
would be the last 10 leave the service"
Prosperity Seems Assured.