Evening star., 1921-10-04
BUSINESS BOOM
BOUND TO COME
American Bankers Told
Gradual Return to World
Prosperity Is Assured.
THREE HALTING FACTORS
More Wage Adjustments. Cheaper
Transportation and Tax Changes
Key to Situation.
THREE HALTING FACTORS
BY the Associated Press.

BY the Associated Press.
LOS ANGELES. Calf. October A.
There is nothing in either the do
mestic or foreign situation to give
rise to the pessimistic conclusion that
the world is riding straight to ruin
John S. Drum, banker. of San Fran
cisco, told the American Bankers AS
sociation, of which he is president. at
the opening session here today of its
forty-seventh annual convention.
Rational examination of our condi-
ton today" he said. must prove to
the greatest doubter that our prob
ems arae but the natural manifesto
tions of a Worldwide maladjustment
that great natural forces are working
to remedy"
Backed by 1000 Bankers.
Reports from more than thou and
bankers provided the basis for Ms
subject, he said.
''The output of finished gt.'ds
throughout the country is consider
ably smaller than year ago, and
measurably smaller than six months
ago. Mr.. Drum said. There is
surplus of manufactured commodities
in the hands of the producers. A
manufacturing has taken place dur
ing the year. In industry, as a whole
the costs of materials, labor and
construction have declined. in the
order named. Increased efficiency OF
labor has been the natural result of
unemployment on a large scale. but
the efficiency of men in the building
trades as whole has not increased.
Taxation in industrial sections has
either increased or remained sta
tionary during the year; in no case
is decrease reported. Wholesale
prices of manufactured goods have
decreased steadily through the year.
Retail prices. on the whole. also have
declined steadily, although not in the
same proportion as wholesale prices.
Slackened Demand Noted.
"In the great cotton states of the
south, in the agricultural states or
the middle west and the west, in
the western mining and cattle rails
ing states. in the lumber producing
regions of the northwest and the
southeast there has been a great
reduction in buying power, conse-
quently Slackened demand for nat
ural products and a reduction in their
value without a commensurate de-
crease in the prices of finished goods
TN the industrial regions there
has been reduction of production
consequent upon reduced foreign pur-
chasing and reduced buying by pro-
ducers of natural products at home.
This reduction in output of manu-
factured goods in industrial centerS
has thrown millions of men out of
employment and consequently has
operated to reduce further the ma
tional buying power.
IF world Influences in the process
of readJustment could be divorced
from domestic influences this coun-
try would not now be considering
problems of readjustment: 1t would
have solved them and would be walk
ing in the old path. But this could
mot and cannot be; world influences
now and henceforth must have a
powerful bearing even on the. prob
lens that in former years were con-
sidered purely domestic.
Names Retarding Factors.
"The reports I have received also
have shown that the three great
domestic influences that more than
all others are retarding the readjust-
ment ofsprices and costs are these:
cost of labor, which prevents ade-
Guate reduction of prices of innu-
merable commodities and services in
the cost of which sthe cost of labor
is the most important factor, and
also serves to prevent full employ
ment of labor. This is due both to
slow adjustment of compensation of
labor and to the continuation of shop
rules that impair its efficiency
Second: Sustained high costs of
and normal movement of commodi-
ties of all kinds to markets.
Third: Continuation of an un-
sound system of taxation that di-
verts working capital from it's proper
channels and thereby prevents ac-
cumulation of working capital that is
necessary for increased production,
for installation of improved methods
of production and for full employ
ment Of labor.
Outlines Way to Prosperity.
Common opinion, expressed in
hundreds of reports that make up this
survey is that when these three
deterrent influences have been elm
mated the chief obstacles to a res
toration of a proper and equitable
price equilibrium will have been re-
moved, trading between one group of
producers and others will proceed
naturally and labor and capital will
be more fully employed in productive
enterprise.
But in spite of these problems the
process of readjustment is going on