Alma record. (Alma, Mich.) 1878-1928, 1922-05-18
COLONEL SMITH
SPEAKER At THE
c. OF c. MEET
REPUBLIC HEAD GAVE GOOD
ADDRESS AT WEDNESDAY
LUNCHEON.
Business Conditions
Subject of His Talk


Alma Chamber Of Commerce, the last
to be held until the cooler weather in
the fall, Colonel Frank E. Smith,
president and general manager Of
The Republic Motor Truck Company
Inc, was the speaker. He gave a
very interesting address on present
business conditions.
In part Colonel Smith said, 1--WE
have passed through the most trying
times of this generation-war, with
it's terrible loss of life, and its de-
struction of wealth, and have, during
the past two years, felt the pinch Of
deflation.
when we entered the great con-
flict the banks Of this country came
forward and financed industry with
out quibble or stint, until gradually
all the productive capacity Of the
country was taken up in govern
mental or closely allied activity.
when this saturation point was
reached, manufacturers began to bid
against each other for materials and
labor, in a blind endeavor to do
more business, and while some did in
crease their individual volume, the
country as a whole, did not.
Material prices scared, labor rates
doubled and tripled and commodity
prices reached an unheard of plane,
and yet the actual production Of the
country did not increase one iota, but
the dollars and cents of business done,
were many fold.
I'm other words, there was great
initiation and three times as much
money was required to handle the
business Of the United States as was
needed for practically the same VOL
ume formerly.
Emerging from the war, and
after pausing for breath, we plunged
into what appeared to be an era Of
prosperity, this being predicted on the
enormous needs of Europe, which
would take all our surplus commod-
tiles and keep our industrial structure
running at full blast.
industrial expansion programmes
that had been laid out during the
war and had not been completed up
to the time Of the Armistice, involv-
ing the expenditure of millions upon
millions of investment in increased
factory facilities, were pushed for
ward to completion.
ITO handle this anticipated volume
of business and this immense pro-
gramme of expansion, the banks of
this country were called upon to ex-
tend still further credit, but without
any corresponding increase in actual
capital investment in industry, and
then, one day, we awoke to reali-
zatior Of the fact, that altho Europe
needed everything that we could ship
her, yet she had no money to pay the
bill, and with our already overex-
tended credit situation here, it was
impossible to sell Europe on credit.
awakening to the seriousness OF
of this situation and fearing sooner
or later terrible crash, if matters
were permitted to run their owr
couse, the Federal Reserve Banl
counseled q contraction Of credit, ant
the member banks Immediately start
ed to scan their loans more closely
and request reductions.
"And then the deflation started a!
sure and as sudden as as the all
escapes from toy balloon when j
is punctured with pin-the bub
BILE had burst.
"Now the automotive industry tool
the big drop at one step early il
1920, having been helped along t
the bottom by a certain great philan
thropist, who, in seeking to GROVE
the aterial supplies into corne
and choke them into submission ant
also to evade federal income and ex
cess profits taxes, cut the price O
his car to below cost and eliminates
territorial lines. Mean time the pub
lie went on buying strike.
Everyone agrees that there Is al
appreciable improvement in genera
business and that the upward tren'
will continue.
"The basis for this expectation !
not that business must improve be
cause it has been bad. Rather, al
analysis Of the fundamental econo
mic situation-increase in wholesal
prices gradually predominating owe
decreases, moderate manufacturin
output compared with freight move
ment, low money rates, and a stron
security market-reveals POVERTY
forces making for business expan
sion.
"More than one hundred million O
the most virile, active, optimistic
aggressive, upbuilding people of tn
world, having about one-half Of tn
worlds producing power, with NOR