Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-01
from National city Rank Circular.


to contend with during the last
month. the volunteer railroad strike.
| unauthorized by the regular brother
| hoods. being the most serious factor.
The congestion on the roads was very
bad before. and this was the finishing
touch Of decentralization. Coal sup
plies were short. many industries
were forced to close down. and in the
upon the public. the larger part OF
| which falls upon the people who
work for wages. Every such inter.
ruption of industry Is most harmful
to those whose earnings afford only
a small margin above the actual nee
essaries OF life. and while always to
be regretted probably Is a necessary
part of the public education in the
economics of practical affairs. It IS
evident that a gross offense against
of men employed upon such vital
industry as the railroads suddenly
quits work by agreement. 1t Is not
conflict between labor and capital.
but violation Of trust in which the
public is the injured party. When
upon this view there will be no more
railroad strikes. and every such ex-
perience as this recent one makes
public sentiment very fast.
No Relation to japanese Panic.
The situation in the United States
is not so related to the situation in
Japan as to be directly affected to an
important degree. The price Of raw
silk has fallen about one-third, but
this has been going on over several
months, and although the stocks Of
silk in this country are considerable
they are said not to amount to more
than three months consumption. No
important disturbance in the silk
trade Is reported here.
So far as the stock market condi-
tons are concerned, the situation
here is not similar to that said to
have existed in Japan. Although there
have been new f1otations and specu-
lative advances in some stocks in
months past, a substantial reaction
has occurred in most Of them, and the
general level Of listed stocks is very
low as compared with any time in
the past. The whole railroad list is in
marked contrast with what 1t was in
1907. and generally speaking the list
ed industrials are also low when con-
sideration Is given to the new values
which have been put into the proper
ties in recent years. The amount of
loans upon listed stocks. taking ac-
count of the total volume of stocks
now listed. the property values be-
hind them or the proportion of such
loans to other bank loans, is low as
compared with 1907 or other periods,
when stock speculation has reached a
climax.
The Scarcity Of Capital.
The credit situation all over the
world has shown the signs Of increas-
ing pressure during the past month
The Bank of England discount rate
Bank of France rate from to s. the
Bank Of Sweden rate from to Z,
the Bank of Finland rate from to 8,
the Bombay rate. from z to 9. The
Bank of Japan rate has been at per
cent since last November.
These advances have been made for
the purpose of holding the demands
for credit in check. and. of course. the
demands for credit are due to scarcity
of real capital. There is a demand
for goods of every kind in excess of
the supply. and there is great need OF
world has not gotten back to normal
production and it is behind with de-
velopment work and construction.
Moreover, 1t is not even using the
existing productive equipment to the
former extent. for the hours of labor
have been reduced. With production,
thus limited. and with the people try
ing to buy more goods than there are
in existence and seeking in despera-
ton to make credit take the place
OF capital IN prOQuCtIOn, tucTo Is great
pressure on the banks for accommo-
dations
Indati0n Going On.
In short, the same process of in
fiation which was carried on during
the war is still going on. and the rise
of bank rates represeptS an enort TO
check it,
The same tendency is manifest in
the United States. The Pennsylvania
Railroad Company. corporation OIL
the highest credit, If any railroad cor
poration can be said to be entitled In
these days to that classification. has
borrowed $5O,000.000 during the past
month for ten years at per cent in
terest. That and the declining market
values of government bonds tell the
story Of the scarcity of capital.
Trade Conaitiens Sound.
There il no evidence that stocks Of
goods are excessive in this country.
REPORTS commonly are that dealers
have difficulty In getting goods fast
enough to take care of their trade.
Il is true that the pressure Tor credit
Indicates that Inventories are high,
hut this seems to refer to raw mate
rails rather than to goods ready for
the consumers market. and this con-
dition results largely from.the delays
and uncertainties OF transportation.
Manufacturers find 1t necessary to
carry larger stocks to be sure OF hav-
ing enough to keep their establish
ments running in all departments:
Large stocks at the present level OF
prices are undoubtedly an element OF