The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-11-30

Elected by the reserve system has
tbeen closely followed by distinctly
easier money conditions and a
stronger investment market.
Regardless Of whether or not the
security markets accurately forecast
/ the future of general business, the
recent remarkable improvement in
the money and investment markets
lassuredly must have beneficial eff
feet on the fundamental elements in
the situation. A long time decline in
money rates almost without exception
has been a sequel of great wars; and
the price of money, a real factor in
the cost of commodities, usually fol-
lows the downward trend of price lev
/ els. The present situation is no ex-
ception.
"The chief cause in the list of the
bond market is, of course, the de-
cline in money rates. A special market
factor at the present time is the small
supply of new issues, other than mu-
nicipals, as compared with the
amount Of capital seeking investment
opportunities. A frequent complaint
expressed by bond dealers is that
their shelves are empty The acute
ness Of the situation is accentuated
| by the prevailing state of business,
the use of new capital for construc-
ton and expansion being but frac-
ton Of what it formerly was The sup
ply of funds for investment purposes
/ consequently is unduly large, temper
arily, at least. There are other tech
meal reasons serving to maintain the
high levels. Distress selling, so prom
inent year ago, has been practically
eliminated. and sales in large volume
for income tax purposes are unlikely,
not only because the period of great
est stringency is past, but also be-
T cause income-tax payments this year
will be comparatively small, especial
~ on the part of corporations. Fur
thermore, selling at present levels
would not establish in general, losses
on investment issues purchased with
in the last twelve months.
The Disarmament Conference.
sThe specific proposals OF Secre-
tary Hughes for the limitation Of ma
val ornaments by the three chief ma
val powers have been accepted in
principle by the representatives Of
Great Britain and Japan. And appar-
emily there is general confidence that
a definite agreement will be reached
for the execution of the plans in detail
THE reduction Of governmental ex-
penditures in consequence Of any
such drastic limitation of ornaments
as is proposed, including suspension
d
would represent a direct economic
saving of immense significance. The
gains would not be confined to the
mere alienation Of the burden of arm
aments upon the taxpayers. On the
one hand, the nations concerned
would be enabled to direct a larger
part of their public moneys to the
support Of programs of industrial and
social betterment; and on the other,
any lessening OF taxation would per-
nit the use Of a larger share Of pri-
vate earnings for ordinary business
undertakings
In addition to the more immediate
results, would be the psychological
background, increasingly powerful
developed by the continuing utiliza-
AlG4 OIL GG1lOl1lAC 1ESOAA NIS AGoS e-S
means for the destructiont Of life and
property, and more as agencies for
the conservation Of life and the crea-
ton OF wealth.
ANY measure Of success which
may attend the discussion Of the deli
cate and intricate problems Of the
Far East would supplement in meal
culable degree the economic gains re-
suiting from the limitation OF arma-
ments, for the removal Of potential
causes Of international friction Is an
aid in the development Of Industry
and trade. Moreover. the successful
application Of the principle OF a con-
cert of nations in dealing with Far
Eastern questions would facilitate
the application Of the same principle.
through machinery for continuing
conference. to other problems which
constitute 3 peril to the worlds
peace. Never before has there been