The New York herald., 1920-01-22
WARNS BUSINESS
CREDIT END is NEAR
F. H. Sisson, Banker, Urges
Manufacturers to Avoid
Speculative Ventures.
MAY PRECIPITATE A CRISIS
Predicts Still Higher Prices, Declaring
Output Of Workers Has
Declined.

n warming 10 DuSlHeSS IHell throughout
the United States that the nation was
periously near to the end Of it's credit
resources and that productivity must be
promoted in every line of industry was
sounded yesterday afternoon by Francis
Fl. Sisson, vice president of the Guaranty
Trust Company, speaking before the an
ual convention Of the National Boot an
cnoe Manufacturers in the Hotel Astor.
Emphasizing the necessity for co-opera-
ton on the part of manufacturers with
the bankers OF the country In an endeavor
to conserve the nations wealth by .re-
framing from unproductiye. speculative
or economically unnecessary ventures,
Mr.. Sisson declared that "the business
men OF the country must bear in mind
that there is great demand for money,
and that the present supply must be wise
~ used to>create new wealth.
The business men OF the country ne
said, must bear this in mind in seeking
credit, and must hencefo<h expect the
bankers of the country to apply that
standard in granting credits. 1t Will oe
to the ultimate good of the business in
terests generally to cooperate fully with
the bankers in maintaining that standard
But unless they do so they must prepare
10 face grtater credit expansion still
higher prices and eventually crisis
which may precipitate reaction with
its attendant evils.
Decline In Workers Output.
I'VE cannot hope to reduce the cost OF
living when the individual output of the
American workman has declined, on al
average, from fifteen to fifty per cent II
tho last two years although he has ob-
taincd-if not wholly e3rnec--unpfece-
Gented increases in wages.
I'VE cannot hope to ameliorate the taS
burden very materially, and thereby les
sen it's power in raising costs all around
If Congress appropriates approXimatelS
five billion dollars for conducting the
peace time activities of the government
during the coming fiscal year, which Is
the aggregate amount of proposed appro-
priations submitted to Congress by the
Secretary of the Treasury recently, and
which is five times as large as the sum
required to transact government affairs IN
the year Immediately preceding the world
war.
II do not adv. ,cate niggardliness in gov
ernment expenditures, but / most rs
suredly declare for common sense econ.
omy such as any large business corpora
ton would practice, and I am firm be-
lever in a practical budget system fol
the government, which should be adopted
without further delay.
''It seems to me that the high peak OF
prices mas not YET DetU TtaCIleu. dltIcuSi
il is by no means without the range of pos
sibilty that. thanks to more sensible
spending. prices of luxuries may topple
while those of some of the necessities Oh
life continue high. This may prove the
first step TO an adjustment of production
that will bring about Increased output oi
the necessities Of life the only way the
high cost of living problem can be
solved"
Tells of Immediate Problems.
He said the railroad and public utility
problems We're the immediate and init
mate ones which should have the atten-
ton of all citizens. taxpayers, consumers
and producers.
'If the people are not able to solve
them" lh said. fairly and sanely in the
public interest. through our duly ac'
credited representatives, we shall have
loosened the very cornerstone of our whole
economic structure and must be prepared
TO see il tumble about US. carrying dis
aster to special interest and general in
terest alike Democracy faces the test
Can il function efficiently in such a
crisis. or must il learn the lesson through
years or experiment and disaster? That
Is the paramount question of the hour.
Dwight W. Morrow. of ]. r. Morgan &
Co.. speaking at the annual dinner of the
association in the Hotel Astor last night
declared that Europe would ultimately OBJ
tain the great loans which she sought
from America, not only because the peo-
pie Of this country sought to lend thei,
money for the sake OF lending, but be-
cause the nations of Europe had proved
by their acts in the great war that they
were honest people. who were credtable
and would make good their promises to
repay.
He provoked loud applause when he cited
the history of France. Belgium. England
and italy in the matter of returning money
borrowed in crises.
He said the loans could only be made tc
European nations when the people OF
America began producing more than they
spent and saving more-yhan they spent
Fifteen hundred persons attended the
dinner. ]. F. McElwain. president of the
organization. was toastmaster.