The Washington herald., 1921-02-11
MANY SETBACKS
RECORDED FROM
TRADE CHANGES
sson, of Guaranty
Trust, So Asserts Be
fore Dry Goods Assn.
LESSON VALUABLE
Failure to Forsee Business
Conditions May Develop
Estimable Asset.

NEW YORK. Feb. 1O.-In an ad-
dress at the tenth annual conven-
tiOn of the National Retail Dry
Goods Association, Hotel Pennsyl-
vania, today, Francis H. Sisson'
vice president Of the Guaranty Trust
Company, of New York. said in
part:
Many business men seem to have
been taken utterly unawsres by
the sudden change in business con-
dItiOns that has occurred in the last
twelve months. Their failure 10
foresee conditions that have devel-
Oped since February of last year
and to prepare for them was prop
ably due in a large degree to the
fact that they were not keeping
well enough informed about the
economic situation in general. Ana
undoubtedly one of the most Yalu-
able business assets acquired in
1920 was the practical, if painful,
course in elementary economics
that it forced US to take.
Tt may be advisable for the
shoemaker to stick to his last, but
gthe business man who has a wider
understanding of fundamental
business conditions than those
which concern his immediate af-
fairs is unquestiOnably better
equipped to meet the problems OF
his own business and more likely
to build for permanence and expand
ing success.
students Proat.
Our business men who properly
studied the economic forces tnar
were shaping business conditions
during the war and in the subse-
quent boom period realized that
commodity prices were soaring too
far beyond the per capita purchas-
ing power Of the mass Of people to
remain at such levels very long.
Such business men anticipated the
consequences of the reckless eXtraY-
aganCe in buying that followed the
unprecedented increases in wages
and income.
And today they are carefully
observing economic trends to dis
CeOunt the future. Merchants ana
manufacturers, whether their busi-
Illnesses he large or small, whole
sale OF retail, are aware that this
1sis a time to buy in smaller quanti-
ties than customary aand buy more
frequently than usual, thereby
avoiding the evil of overstocking
4 in the present transition period.
TThey see clearly that it is a wise
policy not to hold goods for higher
prices than existing costs of pro-
duCtiOn warrant, although in some
instances such goods may have
been purchased at higher prices
than present replacement costs.
They apprehend the necessity for
reducing overhead expenses. not
reckIsssIy. but as far as is com
patible with sound business meth
DDS and with an eye to the future.
The widespread and Increasing
number Of cancellations Of orders
repudiatiOn of contracts and pro-
testing of irrevocabIe credits, con-
stitute one of the most serious bus
mess problems of the day, both in
domestic and foreign trade. Such
practices have been resorted to in
most cases because the decline in
commodity prices has Occasionec
| substantial losses to many buyers
and importers who are endeavOrinG
10 relieve themselves of obligations
sntered into with domestic manu-
IaCturers~ and wholesalers or with
Foreign houses.
Solving Unemployment Problem.
Another problem which vttally
4 concerns all of us, namely, unem-
plOy yme0L- Llhe the TepuuAGl llOn Ol
contracts. this also is a world idt
condition and must likewise be
remedied as soon as possible. While
We have been far more fortunate
than any other nation, it is a seri-
Gus matter to have three million
peopIe out Of work even in this
rich country. That there should
he a certain amount of unemploy
nent in any period of deflatiOn is
inevitable, thanks to our imperfect
economic and social machinery, but
every effort should be made to
minimize the evil. And one of the
most effective measures that can be
taken is to sustain our foreign
trade. which will keep the wheel,
of our industry turning.
Our productive capacity has
steadily been increasing since the
beginning of the world war. 1t now
exceeds the capacity of domestic
consumption. And it follows, there
fore. that no more domestic read
iustments can solve the problem o.
satisfactorily disposing of our sur,
Mus goods. Furthermore, all ma.
lions are so economically interde
pendent that employment in any
one country depends to a large ex
tent upon world wide cooperation
and facilities for the exchange o.
goods. Unless normal conditions
or conditions that approximate nor
1 nal. are restored throughout tht
world, thereby restoring the norma
n purchasing power of the various
- countries, we shall have unem
Dlcyrnent in this country"