The New York herald., 1921-12-27
BUSINESS ENERGIES
TO FULLER ACTIVITY
Guaranty Trust Company
Issues Monthly Survey
of Conditions.
EFFECTS GROW EVIDENT
Pronounced Upturn Seen in
Production of Textiles
Especially.
EFFECTS GROW EVIDENT

American business dCllVlly, emerging
for months from depression. according
TO the monthly survey of business cond.-
tions by the Guaranty Trust Company,
issued to-day. has yet to feel the full
effect of substantial Improvement in
the he.ssfundamental business factors of
lowered interest rates, liquidation" Of
bank credits, reaction in accumulated
stocks of merchandise and the compar-
ative stabilization Of prices at reduced
levels.
Besides, the survey says, the results
of the Washington conference, the set
tlement of the Irish question, evidence
of reviving sanity in Russia and the
probable settlement OF German repara-
tions will combine with the gradual re-
moval of trade restrictions which hinder
European commerce to produce a Ia
vorable reaction on world industry.
The survey warns that liquidation in
many lines is not complete and some
industries may be further depressed oy
present excessive stocks Of goods. Mar
rowing the. spread between relative
prices OF different classes Of commodi-
ties must be prelude to stabilization
of prices probably at a considerably
lower level.
Upturn Is Pronounced.
The general upturn of production
since midsummer has been pronounced
In textiles, less so in iron and steel,
while paper, lumber, tobacco, leather
and foodstuffs have gained also. The
Improvement of the railroad situation
has been remarkable in view of de-
creased traffic, while an increase in net
operating income from $1,07S,20S in ten
months of 1920 to $496,571, ,002 in the
Same period of 1921 is shown.
Afo
vember 23 is a source of general disap-
pointment." the survey says. THE fail
ure of Congress to reduce the surtsx
rates to a point that the recipients of
large incomes would be attracted to in
dustrial investments instead of non-tax-
able securities Is q serious drawback to
business revival. The new law has sig
nally failed to grant relief from the
heavy burden of taxation which has
been borne for the last three years.
Turning to foreign trade, the survey
declares:
THE record Of our foreign commerce
mirrors the fluctuating phases of the
worlds financial and economic condi-
tions in 1921. In these figures Of Amer
lean exports and imports are plainly
disclosed the results of falling prices,
diminished consumption In populous
markets, tagging industries and the
consequent reduction In demand for
raw materials, coal and oil, the chilling
effect upon business operations of the
unstable exchange value of currencies
and the political and economic chaos in
formerly important markets. such as
Russia"
Export Figures Forecast.
The years total exports are likely to
ar
with $s,230.000,000 in 1920, with an
excess of exports over imports of about
$2,000,000,000, CT $949,000,0O0 less than
in 1920, the survey predicts. The
lowered prices are more responsible for
the decline than decreased volume of
business. however. The survey adds:
Until Europe Is more definitely on the
road to financial political and economic
stability there must remain uncertainty
as to our position with respect to the ex-
port Of manufactures, although 1t may
confidently be assumed that we shall
share in the benefits of any Improvement
that takes place in general world con-
d'tions."
The survey believes speculation has
had less effect on the recovery of the ex-
change than substantial Improvement in
conditions, though the Washington con-
ference is unquestionabIy responsible for
e>'hho VI ~. ID itetAls dilCcy Ltls luiH
and Italy have all bettered both indus
trial and !. financial outlooks South
American exchanges also reflect i'm
proved conditions there, says the survey.
The best Improvement in Central Europe
l.: In Czecho-Slovakia, of which the sur
yey saysi gss
IAN excellent object lesson in sound
government financing Is presented by
the record of the Czecho-Slovak Govern
meat where fearless taxation. prac-
tically balanced budget. a gradual but
constant retirement OF unsupported cur
iency and the maintenance of balance
between imports and exports have held
the Cxecho- S1ovak crown, although seri-
ously deprecated from the theoretical
mint value. relatively stable"
Ain speaking OF overseas conditions the
survey remarks: as :,
I'm Great Britain II is significant to
note that a number of economists are
now boldly advocating the cancellation
of the war debts which are due the
British from European allies. assert
ing that they cannot be paid even In
part without ruinous effect upon
British industry. Meanwhile, these debts
rest upon the war impoverished coun-
tries as a heavy burden, depressing
their. morale and exerting n constant
md adverse influence upon their credit,
the rehabilitation of their industries,
their return to national solvency and to