The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-01-01
THE NEW YEAR OUTLOOK.

In a statement issued by James B.
Forgan, chairman of the board Of di-
rectors OF the First National bank of
that in prosperous times-business men
rarely regard the warnings of those
who point out the weakness of the ex-
listing situation but act as If there new
er could be a change for the worse. It
is q well known fact, he says, that
with a rising market buying increases
and decreases with a falling market.
The result of all this has been that
business failures. which have been few
and unimportant for some years, have
increased and are likely to continue to
increase. Those undertakings which
owed their existence merely to the ar
tificial stimulus of the war and intrin-
sically lacked those qualities and at
tributes necessary for sound and con-
sentative progress, he points out, are
now paying the penalty for their de-
ficiencies. The failures so far have
been those of the weaker concerns
whose absence the business world need
not regret.
The immediate cause of the decline
in prices which has brought on the
present sharp business depression, says
Mr.. Forgan, was undoubtedly due to
the action of the federal reserve banks
in increasing their discount rates, but
it must always be noted that without
such action we should have had con-
tinued initiation, which unquestionably
would have finally brought on not a
business depression such as we are
now facing and which in many re-
spects resembles the one following
1907, but in all probability we should
have had a catastrophe such as fol-
lowed the years 1873 and 1898. The
danger at present, he holds, is due
chiefly to. the international situation.
Europe, it is estimated, owes this
country on open book account roughly
four billions of dollars. as a result of
which farmers, manufacturers, mer-
chants, and bankers are finding it diff
ficult to liquidate in g. manner such as
ought to take place at the present
time. The Generalization of the for
eign exchange market is continuing.
date prospect of relief. He says fur
Their:
There can be no complete return
to normal conditions until many of
the manifestations of the social I'M
rest now existing disappear, and the
world as a whole learns that the only
final cure for its present ailments is
work"
In this country crops of nearly all
kinds have been unusually large and
good in quality. In fact, the crops
have been so large and the rest of the
world has had such difficulty in pay
ing us for what they require of our
surplus that the prices of agricultural
products have been unduly depressed
and the farmers and cattlemen of the
country have been complaining bitter
ly and appealing to the banks for aid
and assistance. But the farmers are
in no different position from that of
the manufacturers and merchants, and
where they have been wise and have
saved something out of their large
earnings of recent years they are not
now in difficulty.
Mr.. Forgan's statement concludes
with these words: There is no rea-
son whatsoever to despair at the pres
ent time. The world has received
severe shock but not one from which
there can be no recovery. Funda-
mentally. surface appearances to the
contrary notwithstanding, conditions
all over the world have shown prog
ress and are likely to continue to do
so. The year 1921 promises to be
year of steady tho possibly slow i'm
provement."