The Cordova daily times., 1921-01-13

NEW 1ORh, Jan. l3.-Better mOn- ey conditions in 1921 should result from the progressive improvements tors of the country's bank credit situ- atton, according to statement by James s. Alexander, president of the National Bank of Commerce in New York. He expresses the opinion that needs of legitimate business with a lesser degree of credit strain than dur ing the past year. The chief cause of bettermen, he says, was a reduction in the volume of war paper and frozen and speculative commercial credits in bank resources impairing their liquid ity.
 "Business men are justified in feel ing confident that the money situa- tion in the United States in 1921 will be very different matter from what it has ben during 1920" MT. Alexand- CTS statement says. Certain specific factors are clearly recognizable as the chief adverse forces affecting bank credit during the past year, and there is every reason for believing thy will not be so powerfully opera tive in the year to come"
 To illustrate improvement of un- favorable factors in the situation, MT Alexander cites figures of 800 bank ing institutions, reporting weekly to the federal reserve board. with re- sources estimated at about 40 per cent of the resources of all banks, From
 January to mid-October, he points out, these banks showed a decrease of 50O,000,000 in the amount of United States securities owned by them and of $380,000.000 in loans secured by government securities, which for all banks would indicate a reduction in war paper holdings of about two bill lion dollars. There also was a drop of $200,0O0,000 in loans secured by stock and bonds, this item represent ing in considerable part speculative operations. At the same time loans chiefly for manufacturing, conner cial and agricultural purposes showed an increase of $1,510, 0,OO0,0OO.
 These figures indicate that while there has been marked contraction in
 the non-liquid and speculative ele- ments of bank credits, there has been continued expansion in the accom- modation extended to meet business needs" the statement says. This explains why, although to mid-Octo- Der contraction was tiot operative in the total volume of credit, better con- ditions were in sight in the banking situation. It was because there had been this marked improvement in the quality of credit.
 "A contraction in commercial credits set in during October. in this month the seduction of the non-hquid element also maintained a rapid pace. Thus two clements Of bettermant were operative, improved liquid6ty and contraction of the total
 If the foregoing facts and deduct tious are of value, it is not because of the light they throw on past events but because of the promise they hold for the future They carry the con- victiOn that credit conditions should | be more satisfactory during 1921 than they have been during 1920. These | figures justify business men In ex- pecting our credit resources to func- ti0n more efficiently in the future than they have in the immediate past to facilitate their business operations, | because the four great causes of i'm paired credit in 1920 should not ex- ert the same influence in the year that lies ahead.
 We may assume that war paper, | in passing from the hands of the banks, will rest permanently in the | hands of the ultimate investor, where it belongs, and that it will not again | seriously impair the liquidity of com-I mercial bank resources. We may also hope that we shall not in 1921 see a | national transportation breakdownI which added a large portion to the impairment of credit. Again we may expect that there will not be theI same violent price changes and that, therefore, commercial credit will not be employed for purposes of com modity speculation to the same ex-I tent Finally, we may expect that prices and the production of goods will be cO-ordinated more closely to normal public demands and the emer- gency should not arise to carry such large unliquidated stocks over a pe-