The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-23

ment demand will not be nearly as great
as Il was when heavy war expenditures
were being made
Burdens OF Recenstruction.
It Is easy to see. however. that the
cost Of reconstruction will impose large
burdens upon che banks, which are al
ready facing a considerable problem in
financing the shifting OF industries dur
Ing the transition period. 1t will require
a much higher type OF banking ability to
manage great lending institution sue
cessfuly In the months that are ahead.
In season of large industrial earn
ings and war profits" It has not been
difficult for a lender to fix credit limits
nor TO make safe purchases OF CONNER
cial paper. The demand for most forms
OF merchandise has so far exceeded SUPP
ply as to make IL relatively easy for the
average manufacturer or producer TO end
the year with a handsome surplus.
With the cessation OF hostllitles, how
ever. the country's business interests are
facing different forces and the problem
now is how to shift from an inflated war
basis to the reduced price level Of the
readjustment period. This explains why
tho Federal Reserve Board and other
authorities are cautlonlng the people to
cut down on their luxury expenditures
and pay or their Liberty Loan INSTALL
ments as soon as possible through saw
ings, resulting from reduced living ex-
penditures. instead OF asking the banks
TO carry the burden.
What II Ahead.
Every banker. economist or business
leader who has given out reassuring
forecasts of the future has based his
optimism upon tho assumption that the
people would practise the public and
private economies which were essential
to provide n necessary surplus to make
good the losses Incidental to the re-
adjustment OF industry. This conser-
vatisin is being exhibited IN many quar-
tcrs. but the process has not gone FAR
enough yet to indicate what the result
ant benefits are likely TO he.
The public is not showing an inc!ina-
the situation 70 indicate that even with
a larger supply OF time money the pro-
fesslonal traders would be able to excite
thoroughgoing outside support. The
stock market will be soon exposed to
new influences and because OF the mod
Grafton which has been shown during
the period when the banks were engaged
in financing the heaviest Government
OUTLAWS there may be attractive oppor-
! tunities for speculative activity offered
later on. The outlook is full OF interest
ing possibilities and while the war waste
has ended and the abnormal outlays
have ceased It must be remembered that
the new revenue bill imposes terrific tax
alton.
|. Excellent progress is being made IN
the movement TO provide employment
for returning soldiers and those released
| from the war industries. Industrial lead
erS and large employers of various States
within the past few days have gone on
record as saying that there would be
abundant work for those who desired il.
and that the period Of unemployment
would not be prolonged.
= III SOIUS tneS6 eTOTtS nave
progressed far enough to suggest that
most of the men released from the train
| ing camps or overseas service would find
their old Jobs awaiting them, or be
! quickly placed In positions for which
they were we'll fitted. These efforts are
/ likely TO result in finding places for
! many of the men in the overseas service
long before they are ready to take them.
! This does not mean. OF course, that
every man will be given a good position
/ as soon as lie gets back. but the reem-
ployment system as planned by Federal
and State bodies has been developed in
such a way as to indicate that the hard
| ships resulting from unemployment
would be relatively insignificant as com
pared with the huge economic waste
! which was feared in consequence Of the
! rehabilitation OF those in the army and
naval service at such n rapid rate as
would cause serious glut in the labor
/ market
The readjustment OF working forces
! therefore is being handled with great
! intelligence and while the problem has
not been altogether solved, a scientific
distribution Of workers - proceeding
along lines which indicate that rela-
! lively litus disturbance will result from
| this cause.
Decline in call money rates 10 the
| lowest level since July with the fall I'm
! commercial paper quotations, reflects tho
larger offerings OF money in this market
! by interior banks. Notwithstanding this
movement, however the Washington au-
thorities are not inclined to dispense
with the restrictions governing the lend
J ing Of money upon speculative collateral
and the probability is that regulation of
the money market in some form or other
will be continued until the Fifth Liberty
| Loan has been hoated in the spring. The
money market situation. however. Is ma
! terially easier than It was and with the
! return flow of dividend money next
month the probability Is that both call
and time accommodation will be in in
creased supply.