The Washington times., 1921-01-01
FEELS BUSINESS WILL
ENJOY PROSPEROUS YEAR

ENJUI INUOI ENUUO IEHN
BALTIMORE. Jan. 1.-The follow
ing interview on the business and
industrial situation OF the country II
given by a recognized authority on
business and finance, one whose adj.
vice is sought constantly by bankers,
Investors, manufacturers, corporations
and business men generally, and
hose sources of information are
widespread and varied, What he says
here Is the result OF careful study
OF the whole business situation. and
Is ABSOLUTELY free from prOpaga nda,
either for or against business.
His Interview Is given anonymously,
because he objects to seeing his name
IN print, although he has no objection
to having his views known. II his
name were given. II would be recog-
nized at once as that OF a man who
speaks with authority. Here is what
he says:
GREATEST FEATURE.
1.-THE one outstanding feature OF
present business conditions is the
demonstrated great strength and
financial soundness of the business Of
this country. There has been "A de-
cline in all values; property. in the
space of few months, has lost two
thirds of its selling value. and this
at time when the aggregate indebt-
edness OF all business institutions was
greater than II ever had been In our
history; yet business was generally
strong enough to stand the loss, and
the decline has been marked by a
number of failures so small as to be
almost unexampled.
Securities have declined to a figure
only 10 per cent OF their value a
short time since: this includes not
merely speculative securities, but
many of the soundest securities have
declined to points far below their
liquidating value. This generally has
been accompanied by panic, and yet
there have been practically no
failures of banking or brokerage
houses.
Commodities have declined almost
as much; wool, cotton. sugar and food
products in general have lost from
onehalf to two-thirds of their value
between the time they were purchased
by the large commodity merchants
and the time of their resale. Merchants
who handle commodities and raw ma
terials in bulk probably have been the
greatest sufferers. but there have
been practically no failures.
Manufactured articles have de-
clined similarly and so rapidly that
during the progress Of manufacture the
finished products have declined to a
point below the cost of the raw ma
terial alone. Manufacturers have lost
heavily. but not to the extent, save
in a comparatively few instances. to
cause bankruptcies.
BANK FAILURES ABSENT.
more significant than all Is the alb
sence of bank failures: with so great
decline in values and with bank
commitments three or four times
what they were before the war there
actually have been no bank failures
due to business depression: the few
that have occurred being confined to
places like North Dakota and else
where where the failure was due to
politics and the attempt for political
purposes TO have banks operated on
unsound economic basis.
"All this shows the great financial
strength and soundness of the coun-
try. The impressive thing about this
soundness is that it Is at what might
be termed the peak of the depres-
sion. and indicates, therefore, a great
reserve of strength at the time Of
the maximum strain.
From the best information avail
able, it is safe to say that not only
has the depression failed to ruin bust
mes by causing bankruptcies and IN
solvencies, but it has not even Grip
pied business so as to interfere with
it's future conduct. More than that.
most business houses, notwithstand-
ing the losses of the last year, are
financially much stronger than they
were in 1914 The large bulk han
dlers OF commodities have suffered
very heavy losses-enough to exhaust
n considerable portion OF their war
profits. a few perhaps more-but few
have had their capital to conduct
their bushes on a normal prewar
basis in any way impaired.
Manufacturers. notably those OF
clothing and some food products, have
suffered severely in the last year.
The great bulk of the manufacturers
however, have lost only a compare
lively small portion Of their war pronts
accumulated since 1914. The whole
sale merchants, dry goods, groceries,
food products, etc, apparently are IN
a better position and most OF them
not likely to lose much more than
their profits of the last year. so that
most of them will be little worse OH
than they were at the beginning or
1920, with their previous war profits
unimpaired The wholesale grocers
have suffered, particularly in the de-
cline Of groceries. canned goods ana
food products, but, save in excep-
tional instances, the losses do not
seom IN he sufficient to even en-