The Washington times., 1921-09-25

1haos
try again enters the money market, or
when business Is conducted on q
larger scale.
National Banks Strong.
Everyone IL familiar with the
strong showing Of the national banks
and their ability to take care Of al.
expansion in business. The banks
loaned hundreds Of millions Of dollars
of industrial companies caught with
excessive inventories and inability Of
consumers to finance goods that had
been ordered. Since the first Of the
year industry has been going through
the process of inventory deflation.
Corporations have greatly strengthen
ed their cash position and q majority
have been able to pay back large
sums borrowed from the banks. Man
ufacturers are short OF raw material.
merchants are short Of finished goods.
and the people are short Of clothes,
shoes. etc.
1.-THE steel industry Is on a starva.
ton basis. We are producing less iron
and steel than at any time within the
last rs years. In this country iron
production Is about one-third of the
pre-war output. Great Britain has
produced hardly any steel on account
Of the coal strike. Germany WIS pro.
ducing close to 100000 tons an
nually before the war. Her output to-
day cannot be greatly in excess Of
1000 900 tons annually. Russia Is pro.
ducing nothing and the output Of
France is about one.half Of normal.
THE copper industry has been de,
pressed since the signing Of the armi-
stice. It was only recently that mine
operators decided to practically sus-
spend production. Many other lines
OF industry are similarly situated.
Surplus stocks In the hands Of con-
sumner and producer are being rapidly
wiped out.
Railroads Must Buy.
THE railroads must eventually buy
equipment to the value of hundreds
of millions Of dollars. Although the
country is today on a 4o% productive
basis, more than 500 of our freight
cars are in use. OF the number Of
cars idle, one-half are in need Of re-
pairs. Even a moderate improvement
in business would wipe out our idle
cars. A return to normal would mean
a congestion Of freight even worse
than experienced during the war.
up until a short time ago we
thought we had an overproduction OF
cotton. When It was realized that a
shortage was in sight prices of the
staple doubled. Some think we have
SURPRISED in many other lines of in
dustry. but in time consumers will
realize their error and begin to buy.
The course Of business is directed by
the old law Of supply and demand.
Through rigid curtailment in all lines,
demand for many products will even
tually exceed supply.
Europe Needs Material.
Europe will have a slower time
than this country getting started. The
great need of Europe is raw material.
and most Of the raw material needed
must come from this country. As the
greatest and richest nation in the
world, the United States must CO.
operate with Europe as we'll as South
America in righting economic condi-
tons. This cooperation will be the
foundation for a more rapid return
to normal and improved world condi-
tons.
AS to the security market, the
capitalization Of scores Of concerns
today Is selling below working capital.
In the case Of many companies the
shares are selling for less than the
value OF the plants. There are shares
OF copper mines that are selling below
what 1t would cost to equip these re-
spective mines. Not a large copper
mine has been developed and equip |
ped for production since the advent
OF the porphyry mines. For many
years to come we must depend on
existing mines for our copper.
THE shares Of a large number Of In. |
dustrial corporations are selling at
one-third Of their respective intrinsic
values. Great strides were made BY |
many companies during the war in |
adding to wealth. 1t will be found
that certain of these companies re. |
tanned in working capital and reduced |
liabilities sums greater than |
the present selling prices Of their re-
spective common stocks. They are |
lenders rather than borrowers of |
money. With inventories liquidated !
to more normal level, and with |
wages and costs in general down. in
dustry Is in strong position to take |
of revival in business.
1--WE have suspended drilling for oil,
for copper, building OF |
steel mills, construction Of railroads
N fact the process o. developing the |
wealth Of the country has been su-
,pended temporarily while readjust.
nent has been going on. When things
ret going again, hundreds Of millions
IF dollars will again seek investment In
lew mines, mills and factories"