New Britain herald., 1919-07-26

Capltdl IS iiot ulSElnpathctlc with the desire of labor to improve it's position, but appreciates the conseuuences of shortened production and what will happen when the upward movement is checked by cXhausting buying pow CT. Capital and labor alike are de- manding higher wages to meet rising costs and both are likely to demand still more as long as the public will pay, or until abundance takes the place of scarcity, which as a matter of fact, is the only real cure. That, of course, means work, and more work.
 Heavy Load Upon Money Market.
 The monetary outlook is also a source of decided perplexity. While banking resources have grown enor- mously, credit has also been greatly inflated, and the demand for money is growing fast in all directions. The amount of money in circulation July 1, was 5,S41. .00O,0O compared with S5,- 3S5, ,000 000 year ago the circulation per ca Dita now being $54.2S as against $50.S6 at the same time last year. The total deposits of the national banks, according to the last available state mcnt, were $15,903, 3,000,000, an in crease of $1,51S,000,000 in twelve months while loans and discounts in creased in the same period $644, 000,- 900. Taxation continues to draw cnor- nous sums from productive activity, and there are no signs of relief from this burden, the government still be- ing the most influential factor in the money market. Next come trade re- quirements, which owing to an extra ordinarily profitable harvest will be ex- ceedingly heavy during the approach ing autumn and winter months. The larger volume of trade and the high level of values combined will put a much heavier load upon the banks than ever before.
 Other Pressing Demands.
 Another financial problem of great importance is the granting of foreign credits, which are absolutely impera- tive for the continuance of, our export trade. Government aid in this direC- ton has been about exhausted but To- cal bankers arc carefully devising plans for meeting this situation which will probably be shortly announced Foreign exchange was strengthened considerably by hope that some stabil- ization would soon be esta blished The restoration of Europe and the future of our foreign trade must largely de- pend upon some such successful action and it is fortunate that the problem is to be left to private initiative rather than to government enterprise. Fiji nally there are the requirements of home busine ess which are last, but not least. Home enterprise has been de- ferred for several years, and there is a heavy accumulation of new ventures as dem monstrated by the number of t11 States these amounted to $1,1S2, ,S92,- 900 from January 1 to July i, as against $6S9,4 900 at the same time last year. In Great Britain the new commitments reported were about S36O,OOO,OO0, compared with $55, ,0O0,- 900 in 1917, for the first six months of the calendar year. Revival of home enterprise alone will require enormous sums of money, specially for railroad, Shipbuilding and structural work. The principal cities report $320,OO, ,000 of building permits for the first five months of this year, compared with $2O0,0O0,000 a year ago. The United States is also building about 75 per cent. of the new ship tonnage under construction. Ordinarily business re- Quirements are somewhat elastic, but no less insistent than those above mentioned. This year they will sur pass all records when full demands as- sert themseves. Ii is quite evident therefore that the home money market is facing all the strain that it will be able to- bear: and that, while the banking situation is sound, the lnlta- lions of credit must be kept under constant consideration, if forced li- qudation and unpleasant conse- uucnces are to be averted.
 Good Autumn Trade Expected.
 While it is well to keep these warn ing signals in mind, it is equally necessary to hold ones balance and not lose sight of the brighter side of affairs. The business outlook is un- questionabIy good, and the country is assured of at least a year of great prosperity, beyond which no one can calculate in these uncertain times. Peace and hope have taken the place in the public mind of war and despair. The whole world has shifted it's point of view: the very unrest which marks the change being all accom- paniment of the new forward move ment At home the backbone of our prosperity is the farmer, who favored by a combination of high prices and abundance is enjoying the use of more money than ever in his history. The farmer is not much of an in vestor. and at present even his bor- rowings are small. The result is that funds are accommodating in country banks, to he redeposited in the cities, where they serve to relieve strain that otherwise would be more acute. The agricultural districts will, however, be much heavier purchasers of comforts and luxuries than usual thus stm- ulatng interior trade in an unusual degree.
 Financial Conditions.