davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1919-01-19
More Dollars, but
Poorer Dollars

Our entry into the war did not pro-
toundly affect this aspect of the situa-
ton. Interest rose somewhat. The
securities boom slackoned. but mainly
through the menace of higher profit
taxes and through a general uncer-
talnty as to the duration of the high
profits period. Securities are still
easily to be had at par that report cur
rent earnings Of three or four times
the current rates Of interest.
These facts would afford the kew to
the future movements OF interest and
OF stock exchange quotations, if only
the outlook were clear as to the move
ment Of general prices. And the move
ment OF general prices could be fore
told, If the future policies of banking.
and credit were clear The American
situation, taken separately, would seem
to promise initiation. The European
prospect appears. not very securely, to
be IN the other direction. On the whole
1t seems probable that we shall pro-
ceed with cur initiation until foreign
influences block our further way.
If. however, prices remain stable
if, that is to say, imitation is halted,
the government Financing its domestic
and foreign needs neither by the bank
borrowing that multiplies currency nor
by the ultimate borrowing that pushes
up interest rates, but solely by taxes
interest rates should not greatly
change from the present level
The present degree of initiation Will
shortly have taken out It's effect on
prices and. somewhat more laggingly,
on wages. Interest may harden a little
as the currency loses its margin Of
redundancy. On the other hand, the
longer time trend OF interest is likely
to be slightly downward, toward the
rates that, in the long run, larger
savings relatively to industrial de-
mands will tend 70 fix
New-York tribune., 1919-01-19
To Widen Usefulness
In Fertile Field

on larger scale than ever before.
with appropriations twice as big as in
any previous year, the Commerce De-
partmcnt is setting about, according to
iis chief, to place government at the
disposal of legitimate industry. It
has no aspirations to aid by Offering
patent medicine remedies for the ills
Of production, nor does it aim to sue-
gest easy formulas for capturing the
trade of the world. It's main purpose
IS to give industrial and commercial
men more precise information about
things related to their own occunations
than was ever before available. The
department expects vastly to widen its
service Of gathering and disseminat-
ing economic facts through the Bureau
OF Foreign and Domestic Commerce.
u hopes to ascertain more completely
the nature of the science Of industry
through the Bureau Of Standards.
which has been called upon to facili-
tate the movement of wedding science
10 industry in the United States.
But the programme Of the depart
ment does contemplate making il =
'hing apart from business -austere.
academic and theoretic A new bureau.
known as the Industrial Cooperation
Service, has just been established to
break down any barriers that might
arise.
In describing inc functions OF the
new bureau John Cutter, its acting chief
said; "The Industrial Cooperation Ser
vice, az its name indicates, is here to
serve industry in any capacity in which
u can serve, be it Standardization Of
product or functiouing in some manner
an selling agency for the other bu-
reaue Of the department. Our success
depends entirely upon our ability to
convince industry that we are here to
help and in 10 way TO hinder; to pro
mote, not to restrict.
ne great value Of this service LEG
N the fact that wc are able TO carry
over 70 the Department Of Commerce
the intangible contact between govern
fnent and industry, which vas the
Foundation of the War Industries
Boards unchallenged succcss."
New-York tribune., 1919-01-19
Values Depend on Earning
Power and Interest

It is then not quite true that values
depend on earning powers, but they de-
pend on earning powers as one variable
and on interest as the other. When
one can buy security that promises
per cent on the cost and can borrow
time funds at or per cent, or call
money at or . per cent, it is safe to
look for advances in security prices:
Values are merely the capitalized pres
cnt worth Of forecastcd returns. Origi-
nal costs do not matter except in so
far as they may promise new competi-
tOns and lower earnings. Good will
and monopoly are dividend markers,
and therefore support present market
values. And business men regard
either as capital.
Most economists incline, however, to
regard capital as primarily or eXciu-
aiyelY made up Of industrial items like
tools, appliances, machines, power
plants, raw materials, and explain in
terest as due TO the earning power of
these specific kinds Of capital. Capital
has It's origin, the economist says, in
savings But to the business man, for
most Of his purposes, capital means
merely funds These funds he calls
money. fhis is what he borrows and
pays interest on. And commonly he
''i 'Ef' 'i' N"li''i ilplH IL DdHh.
the typical economist Of the estab-
lishcd tradition high interest points
TO a scant supply Of the means of pro-
duction. or to an especially large de-
mand for the production forms of
wealth. But to the business man high
interest means merely the scarcity Of
banking accommodations. Almost ex-
ciusiycly he borrows or lends what he
calls cash-the circulating medium
either actual money or bank deposits,
banking credit alrordng the same
service as money.
For all practical purposes of the
supply Of capital or the hxation of in
tercst rates, side with the business
man An inflow of gold to the coun-
try tho so-callcd favorable balance
Of trade docs not bring more raw
materials or make machinery cheap, or
reduce the rents Of machinery or of
land but only makes bank reserves
plenty But this inflow enables the
banks to discount paper moro freely
and so TO expand their deposit liabil-
ties Your note is neither money nor
currency, but when tho bank discounts
#, giving You deposit credit for its
proceeds, there comes about a net in
crease i'm the circulating medium.
Increasing bank reserves support n
several old increase In tho mcdin OF
e@ceHnEc. Under our present laws, in
decd and with the establishment Of he
reserve NAsociationsD $40 Of new deposit
New-York tribune., 1919-01-19

currency can be issued for every dollar
of increase in gold reserves.
Interest rates, therefore, arc mainly
and directly dependent on banking con
dltlons and banking policies. Easy
money is really easy banking credit.
Easy banking credit depends, in turn,
on easy reserve conditions and require
ments. For all business purposes cap
ital is plenty when borrowing is easy.
Borrowing is easy when bank reserves
are easy Capital, as made up eXclu-
sively of items of machine wealth,
available in the industrial processes of
concrete production, the business man
practically never borrows. He may or
may not employ the borrowed funds in
buying or making new equipments
Equally we'll he may be going in for
wide advertising, or putting more sales
men on the road, or purchasing fran
tlon of securities. He needs operating
funds These are capital for him
Equipment goods are capital, but they
are not the capital handled in the fnan-
cial markets under the ordinary inter
est contract.
1t was through this ambiguous mean
ing of the term capital, and in oblivi-
BUSINESS of the main sources of the cur
rent supply of business capital, and in
the lack of understanding OF the forces
fixing banking charges for banking
loans that the economists and the bust
pess world were mislcd into the eX-
pectation that the great war would
bring a prompt and rapid rise in rates
Of interest
In fact, however, interest rates ruled
extraordinarily low for the following
two years and have been at no time ex-
ceptonally high. Wealth was being de
stroyed. Current supplies Of products
were being rapidly used up by war
The belligerent nations were borrow
lng beyond anything hitherto dreamed
Of as possible in their stress for fur
ther funds. But interest rates, as the
February, 1916, Bulletin of the National
City Bank reported them, were still
dragging on the ground Call money
at "a to per cent Besc names
on commercial paper at per cent"
New-York tribune., 1919-01-19
Would Standardize Money
Reduction in Variety of L. S.
Bills Is Urged

WASHINGTON, Jan. l8-Gradual
reduction of the great variety Of de-
signs of United States currency to min
imize the danger of counterfeiting and
bill raising is under discussion be
tween Treasury officials ard members
Of Congress. The United States now
has ffty-four different designs for bills
Of various denominations. and officials
believe the resulting unfamiliarity of
the public with the designs enables
counterfeiters to operate moro easily
than if the designs were standardized.
There are now in circulation five
different kinds of 81 notes, five kinds
of So bills, six SIS, seven S10's, seven
S20s, six S50's, six sio0s. four s5oo's,
five S1,o0o's, one $1,000 and two
$10,000's.
New-York tribune., 1919-01-19
" aiiin@ in the Wool yrode

BOSTON, Jan. 49, In st-.amcnt
for The Tribune, the editor Of "Thc
American Wool and Cotton Reporters
said:
Many manufacturers of woollen
goods haze been delaying tine cxccn-
ton OF their programme for fan busi-
ness on account Of lack Of confidence
IN the prices paid ut the auction Of
goVernment-owncd wool. They have
been hoping for lower prices and un-
less they see them will continue to
%nlt. some, however, between the
dcYN "nd the deep sea, or between pay
lnE the prices asked and extrcmc cur
tailmcnt in production, or possiblv
stopping operation OF all thor NM
chlncry, viii prefer to pay the price
and take a chance The feeling is gen
cfai that the minimum bid poliog r en-
tirely inadyisabic. Real maraot vnhl.s
~ill be established only hN aollmQ The
wool at whatever price it Win BRING
New-York tribune., 1919-01-19
No Compulsion in
New Service

The government is recognizing the
fundamental Importance to the nation
OF production and commerce. And at
The expense of all the people it is pre-
parlng on more comprehensive scale
than ever before to promote business,
only asking in return that trade be de
vcloped for social purposes.
so lar as the industrial conservation
programme, which is the most stressed
of the specific functions of the new
bureau, is concerned, its adoption bv
industries is to be entirely voluntary.
out is to be done under the encourage
ment and with the specific approval of
the government. In recently announc-
ing the launching of the new service
Secretary Redheld said: "The func-
tons which have hitherto been exer-
cised by the conservation division of
the War Industries Board viii be con-
tinued by the Department of Com
merce, which has established for that
purpose the Industrial COOPERATION
Service. The work of the new service
Will be voluntary so far as the indus
tries are concerned, without any Gle
ment OF compulsion, depending on con-
sent to methods approved by common
council and trade experience.
Mr. Cutter revealed the plan of the
new service for working out the con-
servation principle.
''Ihe functions referred to in the
Secretarys announcement" he said
are the conservation of labor, ma
terlal and capital through studies of
individual industries themselves. Tho
War Industries Board was war-mak
ing institution The conservation di-
vision as part Of that organization had
for its duty the saving of material SO
that material could be used to DESTROY
German armies; the saving of labo~
so that the labor released could serve
in the military forces or in the actual
industries making munitions Of war.
the saving of capital so that the money
so released could be directly or ind
rectly devoted to the prosecution of the
var
New-York tribune., 1919-01-19
Government in Big Brother
Role to Help Guide Industry
Department of Commerce. Through, Newly Oroan.
lied Service, Aims to Perpetuate the Spirit of
Cooperation Engendered by the War

to make his pilgrimage to the capital.
Besides forging the new bureau into
an instrument for getting men in in
dustry to work together and with the
government, Mr.. Cutter will carry over
some of the War Industries Boards
programme for conserving labor and
materials by the elimination Of unnec-
essary styles But whereas the War
Board took the initiative in bringing
It's IDEAS to industry, conditions are
now reversed, and the Industrial Co
operation Service will act only when
called upon by the industries them
selves
In Mr. Cutters words: "Practicallv.
The war is over; theoretically, Of
course, a state Of war still exists, but
the fact is clearly recognized that the
necessity for conservation of war pur-
poses is ended. In other words the
time has come absolutely to reverse
the policy which was the basis of the
general functions of the War Indus
tries Board, that of mobilizing indus
try to aid the government"
Now government bureaus are mob
ilizing to aid industry
New-York tribune., 1919-01-19
Losses of
individuals

The Senate bill provides that mel
losses sustained during taxable year
beginning after December 81, 1910
and ending not later than December 81
1913, by the taxpayer in his business
or from the sale Of buildings or fac'i'-
ties. acquired subsequently 20 April %.
1917. and used in the production G.
articles contributory to the prosecu
tion of the war. may be deducted from
the net income in the succeeding year
A similar net loss occurring in tax.
able year ending January 1, 1919 81 a.
be deducted from the income Of she
preceding taxable year f sufficient anu
if not the balance may be deducted J"
a succeeding taxable year The equiv
Of this change is clearly apparent
An important change IN tae NC"
bill permits the deduction of losses
in transactions in stocks and secu"
ties, or other property not connec'e"
with the taxpayers business, rega'''
less of profits derived from S'nl'i"'
transactions. Formerly losses OF fs's
character were limited TO the extent Oh
any profits from dealings in properly
not connected with the taxpayers pus'
ness. As under the former law 'os
basis for determining loss in Suea
caaes is tre ccs' of Size property or'
acquired puor to March !, ials, 'p'
market value as OF that date.
New-York tribune., 1919-01-19

and the expanding prices expanded
proflts;. costs of production. wages in
particular, tagging behind prices. With
the increasing earnings and high divi-
dends, and with not greatly changing
interest rates, there came boom in
stocks. Even bonds-fixed income Sc
Gurltlcs- rose in price; more dollars,
but poorer dollars. Wages, it is true,
But the prices under the continuing
initiation kept well in advance of wages.
to the degree that corporate profits
alone rose from 1914 to 1917 from four
to upwards Of ten billion dollars.
New-York tribune., 1919-01-19
ObsoIescence
OF Plant


There are certain classes of losses.
however, which apparently are not
taken care of by either of the above
provisions. For instance, attention has
been called to the manufacturer who.
during the war, purchased at very
high value building and plant which
IN normal times would have been con
sidered about ready to scrap The
physical life Of the property may ex-
tend over number of years, but when
the pressure OF war business has
ceased and new plant and equipment
become available The value e The prop
erty Will Immediately decline due to
obsolescence. If the owner of this
New-York tribune., 1919-01-19
Spanish Credit Drawn On
Government Jtilizes pesclas
Fund to Pay for Supplies

The United States government, it
was learned yesterday has begun TO
draw against the second instamont of
5o,Oo0,0o0 pesetas of the $50, 900 900
pescta credit arranged last fall with n
group Of Spanish banks.
The funds obtained arc being used 10
llquidate debts incurred in Spain in
the purchase Of supplies for the Amer
can forces in France. Under tho terms
Of the credit arrangement Nov York
banks are enabled to draw upon the
spanish banks in the syudicate through
ilhcly- day acceptanccs which the Span
Ish banks dlscoAnt AT : 7. ncr cant
New-York tribune., 1919-01-19
By Merryle Stanley Rukeyser

By Merryle Stanley Rukeyser
4 S THE flare of war is dying
a down, the government at Wash
ington is thrusting out hand
Of friendship to industry and asking
how it can serve. 1t IS processing II
new attitude toward commerce, and
American business may soon find that
it can look upon the government as
something more than a policeman's
club.
No longer. it would seem, is the gov
ernment in its relations with men of
business to restrict its commands to
Thou shalt not AS the makeshift
organizations born Of war needs are
being reconstructed out of existence
friends of trade within the government
are quietly building up structure
capable of giving the command "Thou
shalt"-and of helping business to
achieve constructive ends.
In the days when Teutonic armies
were driving on toward what looked
uncomfortably like world conquest
American business came to the aid of
the state, and without reservation in
quired what it could do. 1t discarded
the old phrases about its rights and
became oblivious of the days when gov
ernment had been the persistent enemy
of big business Business and gov
ernment in those epic days discovered
rev secrets about their own nature and
about each other. They found rich
asset in the touchstone of cooperation.
New-York tribune., 1919-01-19
Article V-Interest and Security Values

INotc.-This is the fifth Of d series
Of articles IN 7chich Professor Daue'1-
port outlines his uie1cs Of the future
of sec1o'ty uolucs, interest, inte1ma-
tjonal trade, gold novome''ts, 70ages,
Immigration, shipping, toratlon, real
cstoie, etc. The sirth article 1oW be
presented neat Sunday.-Finonciol
Editor.
New-York tribune., 1919-01-19
Fictitious Profits on
Government Contracts

In another class Of eases government
contracts were taken during 1918 on the
tasis of the cost of material at the
date of the contract. In order for ths
manufacturer. however, to fill the gov
crnment contracts promptly material
was used which had been purchased To-
the purpose of filing private contracts
at very much lower price than the
government allotment The priva.e
contracts were held In abeyauce owing
to the government contracts, and the
manufacturers now have allotments Of
material on hand at the government
prices which are far in excess Of The
cost of material upon which tho private
contracts. now about to be filled, we're
based. In taking their inventories on
December 81, 1918, under tie existing
law and regulations, the material on
hand being that which has been allotted
by the government, must be taken a.
cost, or cost or market, whichever IS
lower. On this basis, the stock on hsnd
December 81 Is valued very much higher
than the cost Of the material actually
used to FIJI government contracts, ana
which was purchased for the purpose
Of filing private contracts at very
much lower price. The result IS tha'
the profits on the government CONTRACTS
for 1919 VIII show the difference be-
tween the cost Of the material pur
chased for private contracts and the
high price received on the governmon.
contracts, which price IS based on the
cost Of material at the time the con
tract was taken.
The high profit, therefore, is thrown
into the taxable year Of 1918. and be
cause the value Of the inventory OF
material is based or the government
allotment now being used to fill pr-
vate contracts, losses VIII be reflected
IN 1919. In this particular class Of
eases, the manufacturer in order that
his tax may be eqvitab'y apportioned
to the proper taxable years, should be
permitted TO include n his inventory
the material which was obtained for
the purpose OF filing private cor
tracts at the cost of such material
and consider that the material pur-
chased to fiji the government con
tracts, although not actually received
until after that time, was used in the
government contracts. In this Vsg,
the proper portion Of the profits Of the
business will be attributed TO the year
in which actually earned There Is no
specific provision in the bill, as n
present worded, to permit this treat
ment # this relief is accorded the
manufacturer, it must be By reguis-
tions Of the Treasury Department is
sued under the provision Of the Law
which authorizes the commissioner to
prescribe the manner in which inv-n-
tories may be ,aken.
Under former laws the income and
excess profits taxes have been based
upon the income for each particular
year The new bin makes radica
changes in existing law by permitting
the taxpayer to take net losses IN
prior years
New-York tribune., 1919-01-19
By II. !. Davenport
profc5sor Of Economics in cornell
Jni7etNy

W. ERE there no remaining surplus
" of banking reserves and were
there no practically unlimited
ability i'm the reserve associations to
create new reserves, the probability OF
furthef credit imitation would not exist.
The possibility also of an ultimate
contraction Of credit and speculative
reaction with resulting financial and
industrial crisis would be reassuringly
small
Bat any crisis must be several years
removed. even though the imitation CON
tinues These three possibilities then,
CD stable prices,
- falling debated prices,
SD rising inflated prices,
are open and must receive discussion.
The easiest way of understanding
what future conditions will mean is
through understanding what past con
ditions have meant. Supplies of "capi-
ta'7 during the last two years, the
rates of interest and the movements Of
prices in the stock exchanges have
bristled with surprises The prices Of
securities respond rapidly to interest
rates. Actual earnings and dividends
fuctuatc to be sure as also the pros
poets OF continued. earnings and Of
continued maintenahcc of interest pay
ments. But changes in interest rates
and in The forecasts Of interest rates
are the most potent influence for gen
cral changes in exchange quotations.
Neither earnings nor prospects of earn
ings need a change in order to produce
an active market If q tract of land
will rent for 500 it is worth 81 600 in
rates ruling half as high it would
change TO $4,000 property.
New-York tribune., 1919-01-19
Reversal Of War
industrial Programme

}r. Cutter formerly II mcrnbef Of
'o' iez''lc division of tbe War tn
~ 'f'es BOARD, loft Inc cmoloy Of
hofr's, F4fbes b ~. eas}g in tac var
New-York tribune., 1919-01-19
l2ec0nstvrzcti0n- -0zed Beyond

Of War Bride Enterprises,
Decline Stocks Generally Should
Should SoyPublc Utility Corporations Rates
MAY BE Expected to Co Bankru
New-York tribune., 1919-01-19
By Morris F. Frey

Tar Consu1tant Of the Guaranty
TY7tst Co7npony, Of Nelo York
The star-progress. (Opelousas, La.) 1917-1921, 1919-11-29
PARKER is GOING TO BE
ELECTED SAYS JUDGE DUPRE

Parker is going to be elected gov
ernor. This is as certain as death. On
the 18th day of September / gave out
an interview in the city papers in
which asserted among other things
shat in thirty days we would have
the opposition scared to death; in
sixty we would have them whipped. /"
This prediction has been verified.
Parker is sweeping north Louisiana.
The farmers, business men and people
are with him. The Officeholding clan
are climbing in his band wagon.
Those who sixty days ago, thirty days
ago, were endeavOring to help Stubs
are now soft pedaling his candidacy.
The reason is obvious. They have
heard from their constituents. These
have said it's Parker for governor
and woe be unto him who opposes
him.
You have a striking illustration Of
this fact in st. Landry. Only one
man out Of the many candidates for
Stubs. Those who are mot openly
supporting Parker are neutral. Par
ker is a tower Of strength. Parker has
the people behind him. They are
standing like a stone wall. Parker
is going to win and the machine put
out Of business.
Glory Hallelujsh!
GILBERT L. DUPRE.