New-York tribune., 1921-12-27
Outlook for 1922
Is More Hopeful,
In Banks Opinion
DistinciEmprovementinFun-
damcnsal Elements Seen by
Guaranty Survey; Further
Liquidation Is Expected

The distinct Improvement in the
fundamental elements in the business
situation, according to THE Guaranty
Survey" published monthly by the
Guaranty Trust Company. OF New
York, warrants more hopeful outlook
for the coming year than was justitia-
BILE Mt the beginning of 1921.
"Due recognition. however" says
THE Survey should be given to til 6
fact that liquidation in many lines is
not complete Moreover, 1t is still
necessary that production in some in
dustlies mus, be severely limited Co
avoid The serious consequences Of fur
eher depression of certain prices on ae-
count OF excessive stocks Of goods,
while in others new Working capital
must be raised to replace tf.at which
was lost through unwise expenditures
under rising prices. Sucn conditions
as these must be expected to retard
more or less the progress Of revival.
Narrower Price Changes
Although we have apparently en-
sereo period OF narrower price
changes, en- the whole, there IS little
>--E N>'~-N-~ N.AoN 1fc.u progress Is Delug
made toward narrowing the spread be-
tween relative prices of different
classes OF commodities, which must Ne
the prelude of the approximate s3a-
blil5acion of prices. The movements of the
VARIOUS domestic prce indices, viewed
IL connection with that of the for-
eign indices, which have declined re-
Gently, lends is much support to the
expectation of lower prices as to the
expectation OF higher levels in the near
future.
"a period of gradually falling prices.
however, should not be regarded as
preeluding fair measure OF pros
perity on the whole. 1t is possible Tor
the general business man who has sue
ceeded III putting his house in order
and is not oyerburdened with debt to
make profits under declining prices,
but it requires far more business
sagacity and attention to detail than
IS needed under the easier circum-
stances Of rising prices.
Production Higher
THE most gratifying aspect Of the
years industrial events is the uptur,
during the last few months in the gen
eral volume OF production in the coun-
try, which about midsummer had
reached its Lowest point since 1914. AL
though some OF the increase IS clearly
due to seasonal influences, there has
been. nevertheless. since July an Up
turn so pronounced that it mus. rep.e-
sent fundamental Improvement.
The new revenue act. passed on No
vember 2S, IS source of general dis
appointment. The failure of Congress
TO reduce the surta,S rates to a point
that the recipients of large incomes
would be attracted TO industrial invest
snents instead CT non-taxable securi-
ties, is serious drawback to business
revival. The relation OF taxation &c
business recovery should have been the
main consideration in the revision OF
the tax law. but the new law has sigraIly
failed in this respect to grant relies
from the heavy burden of taxation
which has been borne for the last three
years.
Although the law Oh the whole IS
lacking in the reform that should have
been Forthcoming at this time. it con-
tains 4 number OF constructive provi-
sions. The repeal OF the excess profits
tax as OF January l, 1922, is particu-
iarly important, and the relief thus
offered to corporations in the future
by the elimination of this burdensone
and intricate tax should assist in the
revival and extension OF corporate ac-
tivities.'