Great Falls daily tribune., 1920-12-09
The Business Outlook

TT il time for sane and calm dis
l cussion of the business situation.
The business outlook is beng dis-
cussed on the streets, in the cluoS,
in the banks and in the business OF
fices Of businessmen every day. IL
might as well be discussed IN the col
umns OF the newspapers, especiaiiy
as the business situation IS mucn
soundcr than the fears and hysteria
of some portion Of the community
would make it. To attempt TO as
guise the fact that there IS more ae-
mand for credit in the world, not ex-
cepting the United States, than there
is available supply would be tooiish'
Everyone knows money and creolt
is at a premium. When q country
like Norway with no great debt and
much available property offers pei
ter than eight per cent tor a loan OF
twenty million dollars in New York
it is needless to deny that money IS
scarce and high priced IN Europe
When the Anaconda Copper company
offers its first mortgage bonds tor
an insignificant sum compared with
the value Of the property covered
by these bonds and they sell on a
basis that means about eight per cent
10 the purchaser it is useless to deny
that the home demand is greater than
the supply. When these conditions
are present commodity prices go down
and money prices 60 up IN accord
with the universal law Of supply and
demand. This is only another way
of stating the fact that when many
owners Of commodities bid against
each other for short supply OF cash
or credit, the tendency is to give
more and more Of these commodities
to get a dollar Then prices fall and
interest rates go up and we have
an 'appreciating dollar" that i one
that buys more commodities than be-
fore. That is what is going on nov.
We have had the same experience
before. We have had it far worse
than we have it at the present, with
accompanying panir~ and general bus
mess disaster.
Fortunately, conditions warrant no
such expectation a present Inc
country is rich in commodities that
the world stands in need Of. We
have produced more food this year
than we ever did before. There j.
plenty to feed all our population and
leave large surplus to feed the hun
ery in other parts of the world. Our
banking system is sound. We have
had practically no bank failures IN
the United States of any importance.
Indeed, if we except a very few
small country banks which oVer-ex-
tended themselves in discountlng the
farmers paper we can say that we
have had none at all. Likewise, the
few and insignificant. No big bust
ness houses have gone down II the
last nine months. This, in view OF
the falling values of merchandise
which in many cases has represented
losses to merchants and manufactur-
ers who bought or manufactu on
a higher price level, is certainly
a very encouraging fact. The ted
eral reserve bank system has func-
toned splendidly and wisely. They
have helped to tide US over the pain
full process Of contraction in values
with wisdom and sound Judgment,
paving no heed to hysterical appeals
not founded on sound business prln-
ciples, and yet doing their duty man
fully in financing business, agricul-
ture and the productive forces Of the
country.
The contraction Of values or fall
ing prices through which we are now
going is painful process, but nee
essary one for the health of the body
polite. Not long ago every one was
denouncing high prices and calling
on the government to take action 10
bring them down. The government
responded to the call and did what
it could il that respect. We all re
member the efforts, and that they
did not have any great effect. Prices
went soaring upward in spite of sales
of war stocks at less than cost and
prosecutions for profiteering. Gov
crnmental action to bring down the
prices Of necessities Of life was rath-
er futile on the whole though it may
have done some good. The cost Of
living, urged on by immutable econ
omic law, kept climbing still notwith-
standing Now the cry IS reversed.
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