Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-11-14

p n COmpoSite e2QfeSSAoH "a Wv"
Z on the general business situation OF
the country, as compiled by the credit
defense council Of the National As
ISOLATION of Credit Men. is being given
wide publicity in an appeal to the
business men and general public for
a spirit OF cooperation in order
that tho difficulties of the moment
may be speedily overcome.
The council reviewed its statemc Mt
OF the past year wherein it had de-
clared that a period of great war
imitation is inevitably accompanied
by excuses that must be corrected
and had urged upon business men
that they accumulate reserves against
the day when pressure OF goods
would increase.
buying for Desires.
In viewing the four principal as
meets or elements of infation-creult,
buying, currency and laDor-n is
pointed out clearly that the inration
process began with credit and Pro-
ceeded uninterrurtedly until it Was
strained il every market or the
world-in some countries to the
breaking point.
1t is further shown that in this
process buying was fever:shly and
falsely stimulated to satisfy mems
desires rather than their substantial
needs. resulting in inventories badly
ont of balance and in r. withdrawal
Of labor by excess wages from essen
tial to non-essential industries.
Such a condition, say financial eN-
,,erts, could not continue. and a re-
adjustment in commodity relation
ships, a reallocation of labor and
retrenchment and redistribution Of
credits had to come.
The Turn to DeAatiOn.
With credit and currency defa-
.ion proceeding in orderly manner
and carried through with that con-
lummate skill which avoided the
PANIC that often seemed imminent,
authorities emphasize the fact that
the time still calls for equal courage
and skill in that denation OF com,
nodities which is inevitable. and
against which artificial stimulus or
restraint cannot prevail 1t is
claimed that merchants must appre-
oiate that a firm price level is the
basis Of renewed buying. and that
safety rather than the usual profit
until the level is reached-is the
thing of Importance.
When the level is reached, it is
pointed out. large accumulated poten-
tial demands. now held under re-
straint, will be released. foremost
among which is the satisfaction of the
housing demand. which, during the
past five years, has been one of the
most pressing problems all over the
world; likewise the necessities of the
country'S great railway systems and
utilities whose insufficient earnings
limited purchase to the minimum I'M
til service facilities and ability to
meet normal public demands were
never SO inadequate.
While 1t Is acknowledged that much
remains to be done, the constructive
Legislation and the rate adjustments
made effective during the past year.
not only for the steam railroads but
in the public utility field generally.
including electric railways. have been
approved by the majority of thought
full people who understand that these
utilities must prosper if public neces-
stiles are 20 be served adequately.
Granted, tAe improved earnings an
ticipated, the consensus of opinion is
that public utilities Of the country
will now take a vital leadership in
sustaining the credit structure of the
nation by maintaining a normal pur-
chasing power and by strict obServ-
ance of sales contract terms.
Demoralixaffon Of Cancellations.
Expressions Of regsat are manifest
= in the fact that the last few months
in the sense of obligation to contracts
between buyers and sellers, as ex-
hibited in wholesale cancellations and
returns of merchandise, which have
constituted a serious violation of
those standards IN commercial rela-
tionships in which American mer-
chants and manufacturers had hitherto
prided themselves.
Special credit is given the stabiliz-
ing influence of the federal reserve
which, 1t Is said. calls for sincere
admiration as does also the sense of
g. responsibility tho Federal Reserve
Board and banks have exhibited to-
ward every line OF business in every
part of the country. 1t "a being claimed
well the great task devolving upon
them, notwithstanding adverse criti-
cisms have been directed at them.
Government extravaganza, it is
stated, has forced the Treasury con-
stantly into the money market. This
has made II q most important COM
petiter for funds and has been largely
responsible for the high cost Of COM
mercia1 borrowing. 1t is claimed.
which: according to many, is a prob
in the solution Of which all people
have . deep interest
The public IL urgently requested to
resume buying to satisfy its rea-
sonable day-by-da needs. Such
buying. It Is pointed out, is essential
to the continued employment Of labor,
equipment and material.
Tho sharp curtailment Of buying,
which amounts practically to a buy
'ers' strike. Il II claimed, has thrown
business out Of balance as badly az
IT was thrown out a few months ago.
when there was an orgy of buying
and an utter disregard of values.
Extremes are deemed costly and all
are importuned to adopt a middle
ot-the-road course.
Credit h suAeient supply.
Liquidation in credits and the GER
tainty that the peak OF credit de-
inands to move the country's vast har-
vests have been successfully passed
have nearly accomplished the first
struction activity fs the opinion of
many financial and industrial ex-
perta.
Credit resources, according to this
opinion, which had been taken up
by unproducttve capital require
Inenfs, have been gradually released,
and WIN soon be available at rea-
requirements for construction which
for many years were set aside. 1t
is felt that credit il in ample supply
for all legitimate going business
IL only 1t is not obstructed by trans
portation delays problem now,
holding goods from the market; by
unreasonable resistance to the normal
methods OF commodity defation, and
the tendency on tho part of buyers
of all classes to delay the payment
of their merchandise obligations.
Mechanical EnEineers to Meet.
Heading railroad men and engineers
viii discuss practical measures for
improving transportation conditions
ut the forty-drst annual meeting OF
the American Society Of Mechanical
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