The sun., 1919-03-10


exceptional Importance and show that
the country is on the upgrade again. A
, large volume OF business is being done
so conservatively as TO keep the record
OF commercial failures many points be-
low normal Preliminary arrangements
to bring out the new Victory loan SHOW,
tnht the notation will be highly sue
cesstul and in all probability provide
the Government with sufficient funds
TO close UP its remarkable programme
or war financing. Industrial managers.
instead of repeating the errors OF 1903,
are reducing dividends TO a basis OF re-
construction prof1ts and taking care TO
strengthen working capital TO provide
adequately for future needs.
savings banks are showing good gains
IN new deposits, notwithstanding the
country's record breaking investments In
Ii,oerty ponds and the success OF the
war Savings Committee in reaching the
surplus funds OF the man of very small
means Back Of those considerations is
the knowledge that the Federal Reserve
system holds a sufficient gold reserve to
ENABLE member banks almost to double
their loan accounts and keep within the
law. The Federal Reserve Board would
not tolerate such expansion except In a
national emergency which will not
arise. The fact that the country's bank
surplus is enough to support such in
creased borrowing operations, should
they be called for. shows how strong Is
the bank position.
The country has gone a long way In
the path of Industrial recovery, thus
bridging the period, between war activ-
ity and normal business which high ex-
perts said must be travelled before re-
adjustment could be effected The quo
tations OF basic materials have been
lowered, the cost of living has been
somewhat reduced, war restrictions on
trade and finance have been abandoned,
and the foreign demand for American
products has broadened in a way which
shows that new high records m foreign
commerce will be made as soon as ade-
Quate shipping facilities be offered.
The transition process has not plunged
the country into such disturbance as
predicted would follow a serious effort
to force renewed buying of basic mate
rails, The inquiry is broadening grad
ually. and with steel manufacturers con-
ferring with Government authorities to
reach a fair price basis for doing busl-
ness the probability is that the con-
sumptive demand will enlarge and an
immense volume of orders be given out
Should those fortunate results be at
talned in the steel trade the movement
probably would extend to other indus
tries, with the result that the industrial
impulse would be Quickened and broad
buying movement develop. Extremely
interesting developments OF the last fort
night show that industry is being sta
bilized and better business in sight. Sus-
tanned strength in industrial stocks and
heavy accumulation of certain shares
has been largely In response to those
changes in trade conditions. The stock
market IL prone to go to extremes and
the movement may be overdone. But the
thing to remember IS that the readjust-
ment Of security prices antedated the
decline in commodity prices and the fall
In the quotations of basic materials.
The question at issue is whether the
stock market is not exercising shreVd
judgment Of far reaching benefits which
will result from the interesting move
ment in American industry.
The business outlook has been
helped definitely by enacting the law
enabling the War Department TO pay on
Government contractors The disburse-
ment OF those funds is under way and
the bank position will be relieved materi-
ally through taking up of loans by con-
tractors forced to borrow heavily soon
after the armistice was declared. Some
firms were forced to the wall, owing to
delays incident to paying off of war
Claims About $4,000, 100000 will be re-
leased through quick auditing Of claims
against the Government.