The Birmingham age-herald., 1921-07-05
By HOLLAND

NeW York, July 4.-(Specfal. )-F. Q. Watts, who is president of tha First National Bank of St. Louis and is also chairman of the finance com mittee of the American delegation to the international chamber of com merce now in session at London, said to the members of the conference that the United States is confident or an early return to stable condi- tions. This Is In line with statements which have been made by others who are qualified to speak. It tends to justify the belief which was held late In the winter that notwithstand- ing the business depression, the promise was excellent of a change which would be followed by inn provement, as soon as readjustment was completed.
 MT. Watts, in speaking of the dan gerous expansion of credit, fixes De- cember of last year as the time when that expansion reached it's peak. The governor of the federal reserve sys- tenn, MT. Harding recently intimatei that the enormous expansion of credit in the United States began to be checked in the closing weeks of the calendar year. IL was in fact, due to this change that so many of the men of authority felt justified III soy lHS lIdI improvement began early in the winter, although the public did not recognize it at that time.
 It is an astonishing fact that not withstanding the conditions which prevailed in 1920 nevertheless a greater amount of capital issues were offered in the market than in any previous year. Almost all of these issues were absorbed. The ag- gregate was many hundred millions. If there had been real financial dis tress similar to that which prevailed in the first three years of President Cleveland's second administration or which again prevailed in the fall of 1907 1t would have been impossible to float these enormous capital of ferings.
 The demand for new capital how ever, continues MT. Watts estimates that s26.000, 0o0,0 of new capital is now needed and some will be secured within the next 12 months. His esti- mate is based in part upon informa- : tion which he has received from rail- road authorities. They have told him that the railroads of the United States need at least $6,000, 100000 if they are to be put in position to ake the betternfents, Improvements and the expansion of terminal facili- ties which are needed if the railroads of this country are to be in position to handle all the traffic which vii! be offered.
 Six Billions for the Railroads.
 These estimates do not differ greatly from one which was made by James J. Hill 15 years ago. He at
 that time said that the railroads should receive at least $5,00o,000, 900 a | vt %o1 rA ch . tinue to receive that for 10 years If they were to be made adequate for the transportation demands which has come to them. He spoke espe- cially of the need of a greatly en- larged terminal facilities. This need railway managers say Is greater to- day than at any other time.
 At least $5.00o. 100000 is needed If the shortage in building and housing conditions Is to be ended, and public utilities so many of which are now greatly in need of improvements VIII require from $3,000, 100000 to $4,000.- OO0. 900. When conditions become stabilized, this new capital will un- doubtedly be secured. MT. Hoover, Secretary of Commerce, Is reported to have said to friends in this city that he thought conditions would pc stabilized within two years. MT. Watts apparently agrees with the Secretary of Commerce, although he does not fix any definite date for the perfecting of stabilization. He in inmates, however, that there will be an early return to stable conditions and 1t may be that he Is of the opin- ion that these favorable conditions will be established within shorter time than that named by MT. Hoover. The Victory Notes
 Within two and one-half years little over $7,000, 900, 900 of the short | term debt will mature. A part oi this maturing debt is represented by the victory notes and war savins securities. There is no doubt that the Secretary of the Treasury, MT. Mel | lon. has had this in mind when he | was considering the funding of ths | debt which our allies owe to the l United States. Of course the govern ment will not be able to pay $7S0.- 0Oo, ,oo0 for the redemption of victory | notes. certificates of indebtedness and war saving securities. Therefore | some method of funding these ob- ligations must be adopted.
 l A good deal of American capita went across the seas, while the wal
 was in progress, but the excitement
 occasioned by the war caused this
 movement to be overlooked. Perhapi