The New York herald., 1921-01-21
ADVERTISEMENTS.

laDOred under the greatest handl-
caps, the worst perhaps being that
a large portion of our modified
bank capital had been practically
commandeered to carry the govern
ment's floating Indebtedness. In
addition to this, most of our banks
behaved heroically. Time and time
again they advanced money on
what they knew might prove to be
loans frozen in character for months
and possibly years. In spite of all
this we have had an improvement
in our banking situation over
period of a few weeks which could
not have been positively predicted
for an equal number of months.
Our stock and bond markets have gone
through what was a real panic, but one
which not only did not end in collapse but
one which has developed strength which
cannot now be broken
Every previous business depression has
been marked by vast over production.
If over production exists at all it is the
exception, not the rule. What is pointed
to as over-production is really over-con-
centration. Because one business concern
is over-stocked that does not prove that
the nation is over-stocked. Most factories,
wholesalers, jobbers and retailers are
either already carrying less than normal
stocks or are rapidly getting themselves
in that position, just as might be expected
in an anticipation of further recession of
prices.
Some commodities, like crude rubber,
are below their cost Of production, and
except for temporary price movements
there is now no way for them to move
but up-and here the experience of the
stock market will be repeated in that
plenty of buyers will be found at higher
prices as soon as it is known that bottom
has been touched.
In spite Of the fact that wages arc
high, and production cost of labor still
higher, there is an army of men with
plans all made and an abundance Of
capital ready to start all sorts of build
ing and business enterprises, awaiting
only the time when they can obtain
cash for their operations by the pledge
of capital.
There are many enterprises which
can 60 forward whenever they can be
financed where the increased cost of
building now can be covered by con-
tracts and amortized over a period of
years or where present increased costs
can be wiped out against earlier opera
tions. l refer, for example, to the fact
4
lower New York and long time leases
made at prices which will not only pay
a handsome income on the cost of build
ing now, but will amortize excess cost
down to pre-war costs.
Railroad rates are on a permanently
higher basis, requiring more centers of
production to offset increased freight
rates. Oil now carried by railroads can
support pipe line even at present costs
for construction.
The price Of coal at the mines will
permanently be higher than in the past
in spite of any reduction in the wages
paid to mine workers, and this makes
profitable the enlargement of existing
hydro electric plants and the building
of new ones.
The very increase in the production
cost of labor opens up great fields for the
installation of labor saving machinery
wherein the saving will be more by
building now and securing the benefit
of earlier operation than by waiting for
lower costs
Here and there factories are starting
up which were shut down more from
temporary financial stress, or else
through fear rather than by necessity
and the same things shut down many
factories which have not resumed.
But all Of this recovery depends upon
our ability TO do the vast amount of
financing l have spoken about above.
There are reasons why those who have
heretofore furnished the funds for our
expansion of business can do so no longer
We must develop new class Of investors.
That the wage -earners can save and
invest large sums of money in the ag
gregate is no longer a question, but is
proven fact, but it requires the coopera-
ton of their employer.
There is no waste so extravagant as
the waste due to unemployment.