Evening star., 1920-03-27
SCANT MONEY SUPPLY FAILS
TO CHECK STOCK MOVEMENT
Business Mans Point of View In SHARP
: Contrast With That of Banker.
. Errors In Pessimism.

ment Of foreign buying would occur
means would have been found to right
the foreign exchange. situation.
The first big consignment of English
gold is on its way to this country. 1t
win be followed by further transfers.
and these. in combination with the
measures which our business men are
about to adopt to extend long-term
far to settle both the problem Of the
exchanges and the problem of the ex-
port trade.
Recovery in Sterling.
The extraordinary recovery in ster-
ling from its low Of 3.19 in January
to practically the 400 level is. of
course, the index of the effectiveness
of these correctives. The Copper EX-
port Association, in working out it's
ICED the whole outlook for the cop
per trade and this is very importa Mt
accomplishment, but it is still more
important in It's suggestion that other
industries will follow the lead of the
copper representatives and that not
export movement be avoided. but the
way will be prepared for fresh eX-
pansion in sales of American COM
modities abroad.
The general public has been slow
to apprehend the Significance of these
deyelopments, but in banking and
business circles 1t has been fully ap-
preciated and the stock market OF the
last few days has registered the
change in sentiment in high places
thereby induced. This is not the nrst
time by any means that large sec
tion Of the banking community have
been wrong in forecasts. but 1t IS
hard to recall a previous occasion
where they have been any more
wrong than they have during the last
few months and where their errors OF
Judgment have been more expensive
vestors.
The trouble was that bankers
that is, many of them-couid oniy
look at things from the one point OF
view, namely: the inflated state OF
the loan accounts and the poweriui
pressure that Is being brought to bear
nv the federal reserve authorities TO
cut these down They concluded from
this that there would have TO pc Wioe-
spread commercial liquidation lnVoiV
ing a check to business actiVities any
leading in the end. perhaps some o.
them thought, to commerciai =, 1919
Business Mans View EindAcatee.
The business mans point OF we"
sharply contrasted with that OF tne
hanker ia now being vindicated. From
thi. point of view business conol-
tions were wholly different from those
which preceded the industrial con-
yulsions of the past. To be sure
prices were abnormal. innation ulo
exist. credits were too much eXtenoea.
Rnt against all this was the Tar more
vital fact that the relations between
Industrial demand and supply were
sound; that there was % no
surplus of production, no unempioy-
ment. but, on the contrary, pro
shortage of labor, and that
none of the essentials
Which enter into a period of CONNER
cial decline was present. MoreoVer'
the business men felt confidence ~
American Initiative and ingenuity
which the bankers seemed to lack.
that a way would be found to soive
the difficulties Of the foreign ex-
changes before serious harm haa osen
done. We are now able to 3uage
which of the two sides was, right IN
it's attitude.
:. toopyrisht. 1920. b. 8. P. west)