Evening star., 1921-09-18
BY i. A, FLEMING.

New York has set an example for
scores of banks. trust companies. or
ganizations and individuals in max
ing the daring, almost unheard Of.
reduction of more than $14.000.000 in
surplus and profits, and cutting the
annual distribution by IS share in
a drastic move to clean the slate"
The Guaranty Trust Company, en-
deavored to hold the trade of South
and Central America for the United
States; to build it up; to make ad-
time to do more than its share to aid
the foreign trade through other than
South American channels.
Its credit facilities were freely used,
trade finance corporations have found
to their sorrow, the ability to pay
was not sufficient to meet the con-
tractual obligations.
1t was because of this development
that the great foreign trade enter
prise sponsored and backed by the
American Bankers Association, an
organization strong enough to do
anything, failed of reaching maturity
and being. despite Endorsement and
united ehort of many powerful in
terestS.
Good Americanism was back Of the
efforts of the Guaranty Trust Com
pany. 1t spent a fortune on informa-
were opened everywhere worth while.
1t played its part and like many other
corporations in the last year found
its return from the seed sown un-
sufficient
Rumors affecting the good name of
the Guaranty Trust Company. as usual
In the case of losses reaching any
proportions of serious nature, were
circulated, and stories never grow
smaller
Then, either some bank official or di-
rector, dared to press for action and
found others of his own ilk who
backed the losses off the books. even
at the expense of $14,OO0,OO0 surplus.
and undivided profits, but leaving
$1O.000.000 surplus and good profits
plus.
1t may have been poor business
pollcy that suggested the loans made,
1t may have been a mistake, but the
company will make faster progress
without the incubus and with re-
stored confidence, toward recuperation
ana greater usefulness, benefited by
If memory is not at fault, and the
chances are that it is not. il was
James B. Forgan who took the bull
oy the horns in the First National
Bank OF Chicago and cleaned the
holder, unless he died of heart fall
ure within year or two, ever re-
GREETED it,
There are other institutions that
have money tied up in frozen credits''
despite the thawing weather of the
last summer, and the ultimate recov-
cry OF business. generally speaking,
Will be helped by cleaning the slate
ana salvaging the weak account later
on.
And the Guaranty Trust Company.
with its deposits of $44S,265,970 has
set the example.
Some Things Lacking.
Progress on the road to recovery
Is checked by continued high rents.
Dy failure of some merchants to give
the consumer the benefit of reductions
In commodity prices, by the failure
OF reductions in steel and iron to ap-
proach the levels of 1914 and by ad-
vances in certain commodity prices.
Wnieh are an argument against
through lowering of wages
Lower prices for commodities, lower
prices for building material, with an
immediate reduction of rents, rather
than the advances that seem to be the
rule, are sadly needed in the scheme
OF rehabilitation and the return of
the normal
Reverse Action.
Great damage to the cotton crop
was the excuse that started cotton
and the stock markets to higher
levels: shortage of wheat crops also
helped the cereals. and 1t may be
that exhaustion of various stocks of
goods carried by manufacturers will
eventually be responsible not only
1or improved business but also for
higher prices
Cotton planters welcomed the dam
age of the weevil and the resultant
Dig gain in price; the same with the
wheat growers, and general business
cheered because it would give the
make him again a factor on the buy-
ing end of business.
Nothing has helped the general out
look as much as did this rise in the
cereals. The degree of cheerfulness
impaired to the south and west has. in
a measure radiated Improvement all
over the country-sometimes not so
much in actual betterment as in inn
proved sentiment.
Wall Street Action,
Higher levels have been established
on the New York stock market and
the daily volume Of trading has in
creased, while the bond market has
again confirmed the ase and abun.
0ance OF money seeking investment
with safety.
There is no question but what a
healthier sentiment has been engen-
dered on the stock market; that the
pressure of liquidation is probably
oyer-that is, forced liquidation-but
neither is there much question but
what the sharp advance of the last
rev weeks has been engineered by
pools, taking special stocks under
their wings while using the advances
forced thereby to dispose of other
stocks. Other spectators are fol-
lowing the leaders, ready and Quick
TO turn. letting no profit escape-nat-
ufaliy leading to reaction on any
attempt at general cashing in.
1t is sSobable that there has been
some replacement of stocks sold at
much higher levels, but this kind Of
buying has been probably more IN
rails than industrials. while the gem
eral speculation turns to oils for the
daily trading operations.
Railroads continue to show gross
decreases. Within a few days the
question of general strike will be
settled, with the chances against add
ing to the ranks of the unemployed.
Business Disappointments.
Business has been disappointed in
the consideration of the Fordney
tarin measure by the Senate COM
mittee and by the leaders in the
Senate.
Business hoped that the Senate
would make the new measure ef-
fective March Is, 1921, and that many
other changes would be made in COM
mittee before presentation to the
Senate for action
Business believes it had a right to
expect all these things of it. The
administration was pledged to it, and
the continuation Of the excess profits
until 1922 is frequently referred to as
n dof Nf 10