The Sun and the New York herald., 1920-09-27
S6,OOO,OOO,OOO RISE
IN NATIONS CREDITS
contlnusd From FRH Page,

sorption into permanent investment and
the retirement Of the public debt IL
shortening tho purchasing medium, and
American factories and American farms
are producing at top speed, filling the
deficiency caused by the war There
will come gradually, In the opinion OF
Cabinet members dealing with the COM
meroe and finance OF the nation, the
striking OF something like a balance be-
tween these Two factors, bringing a new
and more or less stable price level
Aside from these principal factors,
Secretary OF Commerce Alexander ana
other officials are taking into account
the changing movement OF American
foreign trade, Exports that increased by
leaps and pound during and Immediately
following tho war are now decreaAlng
This means a turning OF commodities 10
domestic uses Imports are Increasing
In greater ratio than exports are dl-
mlniahlng, giving an additional quantity
OF goods for domestic consumption
Food Price Drop Not Good Index.
One Of the factors In the sudden drop
In food prices has been tho checking
OF food exports abroad at time when
American crops are az n maximum The
American farmer produced greater
yield OF all OF tho staple food oommodi'
ties this year than he did last year
giving greatly Increased supply with
purchasing power declining.
Food prices, In tho opinion OF Gov
ernment experts, are not as important
an index 10 the general trend ~ are
commodity prices, for two reasons
First, the present situation In food
prices Ia largely seasonal, and VIII
shade off In proportion 10 the amount
OF surplus food that can be stored "a
meet future needs, and second, and more
important, because the production Of
food was the only industry stimulated
10 maximum production Of ilA usua
product by the war, Factories OF every
description were diverted from the pro.
ductlon OF goods for household OF
civilian needs, 10 tho production OF
munitions for destruction In the war.
Therefore there waa big shortage
OF domestic products, which incr Nsed M
the war progressed. These factories
turned back 10 domestic needs are Just
beginning 20 catch up on the shortage
ana In trade terms, getting In position
10 meet the demand
Many factors are contributing 10 the
shortening OF the purchasing power OF
millions Of individuals throughout the
country The most important, according
TO Treasury report, In the changing oi
Liberty bond holdings from the hands
OF the spenders 10 those OF the aavera
Millions OF Americans getting increased
wages during the war answered the pa.
trlotlc appeal and put their Increased
compensation into Liberty bonds. AftoI
the armistlce, when the fire OF patriot.
Ism had died down. millions began "a
spend these accumulated savings BY
either borrowing on their bonds and
spending the money or selling the bonds
outright
Millions or dollars worth OF bondi
were used In trade. They were accepted
In payment for many classes Of com
modities from automobiles down and
were eventually sold on the open mar
ket. going 20 the investors. Most OF
this clats OF spending In believed by Of
flcials here TO be over. Those who spent
their savings have shortened income
and less spending power, Their inability
20 spend lessons the demand for goods.
There are outstanding. however, many
millions In Government securities that
are eligible for discount and that can be
used 10 Increase purchasing power
through borrowing at the banks.