The Washington times., 1921-09-25

]hS icScht slrcHBtn OI BOOu stOChS
and bonds is a result of this agree
ment that the worst of the depression
had been passed. Stocks and bonds
were bought because they were cheap,
I and with the belief that industry was
headed for better things. The improve
ment in securities was due to buying
OF this character, and not to profess
sional manipulation. The stock mar
ket passed from the control Of pro-
fessionals to what Wall Street terms
big constructive interests"
Want No Bull Market.
1t is not the desire of bankers and
nnanciers to foster q wild bull market.
Neither do they, care to sec rapid
recovery in industry. What they are
working for is a gradual. safe recovery,
that will put back to work the several
million men out Of employment. In
this they have the cooperation of
Washington, and constructive rail-
road and tax legislation is looked for
before the end Of the year. 1t Is held
there can be no permanent prosperity
with demoralized transportation.
A prominent banker gives the fol-
lowing reasons for his belief that the
corner has turned in business:
I'm the first half of last year when
we were producing raw and finished
materials at a record rate, and prices
and wages were soaring to unprece-
denied levels, the country was crying
that we were suffering from under.
production. Manufacturers were ap-
pealed to to produce more and more
In order to check initiation. They took
heed OF this appeal and sold steel,
woolens, sugar, automobiles, leather
and other products until their order
books were swamped. They bought
hundreds of millions Of dollars worth
OF raw material at exorbitant prices
for conversion into finished materials.
They obtained huge credits from the
banks. Prosperity, they thought.
would continue through the greater
part Of this current year. We all know
what happened through this excessive
over-confidence.
Reimbursement has been going on
ever since. and few people can fully
realize what has been accomplished
in this direction over the last year in
correcting an economic situation which
in its seriousness was without a
parallel. In this direction we have
made great strides Of q constructive
character.
I'VE are on the verge Of q period
of prosperity that will be backed by
rigid economy. There will be no wild
initiation. The day of the silk shirt
millionaire has passed into history.
Basic Conditions Never Better.
Basic conditions in this country
for a return to Aormal conditions
were never better. We. are now suf-
fering from interpretation and de-
flation in contrast with last year
when we were experiencing over-pro-
duction, initiation and reckless extrav-
agance which are responsible for ex-
listing conditions. We must now 60
through the process Of economic re-
adjustment. Let me cite a few rea-
sons for my belief that conditions are
now ripe for a turn upward in com.
merce and industry.
1.-The United States now holds APP
proximately one-third Of the worlds
monetary gold supply, about $3,375.-
900, 900. In 1914 this country only
held gold amounting to a little over
81, 00O, 000, 900. The increase since
1914 Is approximately $3.50 ,000, 900.
Thus, figuring that 81 in gold is made
the basis Of $40 credit expansion
throughout the banking systems Of
the country, this additional gold since
1914 is the foundation for a credit
expansion of $4,000, 900. 900.
Bankers are in accord that the
heavy influx Of gold to this country
will prove advantageous when indus
OBSERVATION-DISCLOSURES