Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1922-10-11

LOnsdale's telegram inviting me &c
speak at this convention expressed
the belief that / might say some
thing TO you that would be helpful &c
banking and helpful TO business. Ny
discussion of the business and indus
trial outlook for 1922. published in
The New York Herald. on the first
day OF the year, seems to have beer
largely responsible for the impress
sion.
That forecast was substantially
optimistic This is as far as It went
The basic conditions on which sound
prosperity rests were not yet right
but they were improving. We had
put twenty months OF retrenchment
between US and the wild orgy OF
imitation and speculation of 1919.
Ny purpose was to show that we
were making progress toward better
times. and that what we needed was
confidence. People never get very
far, never accomplish very much,
wnIle enshrOuded IN gloom. Conf
dence is necessary TO progress. but
confidence governed by facts and
sound reasoning is the only conf
dence worth while.
We are a mercurial people. We
are either up in the clouds or down
In the depths. When business is
good, industries are humming. Sc
curities booming, there Is no limit
to our optimism. We are tempera-
mentally incapable of seeing that
the period of high pressure activities
cannot go on forever. And so. too.
we are temperamentally incapable
of seeing any light and hope ahead
when we are plunged from the
bright heights Of booming prosperity
INTO the valley Of gloom. This does
not apply to farseeing. sound-rea-
soning men. but II is true Of the
American people in the large bulk.
One OF the souDdest pieces OF work
ever done in this country, one OF the
most necessary pieces OF work ever
lone in this country, was done by
he banks in 1920, in calling a halt
20 speculation and reckless expaD-
sion.
Il called for fine courage TO jam
on the brakes as you gentlemen
damned them on at that time. We
were running wild with wide open
throttle; we were running straight
for a smash that would have para
wed the nation and stunned the
world when, under the able leader
ship Of Mr.. ". P. G. Harding. gov
srnor OF our reserve bank system.
you warned the country that It must
Immediately begin slowing down.
and you applied the remedy that
meant slowing down.
There was no other way to save
The situation. There was no other
force. not even the Government it,
self. that could have saved the stu
alton. Industries cannot run with
out money. fuel business cannot
function without money fuel. specu-
lation falls fiat without money fuel:
and since the banks held the money
OF the country they alone were in a
position 10 initiate and carry
through retreDchment.
In my January discussion OF
conditions this year as in my Janu-l
airy discussion OF conditions last year
painted no alluring picture OF
business. saw no boom in the Of
hDg. and did not wish to see one,
for conditions were not yet right.
What I wished to see. and regre:
hat we have not seen, is a gradual
but thorough liquidation in our pro-
duction costs and in distribution |
costs. a general liquidation in house,
rents and other living expenses. !
with this liquidation we should /
have a sound foundation on which |
10 build business and 10 look with |
justifable confidence for good run /
OF prosperity.
But instead OF lower production |
costs. we have gone to higher pro-
duction costs; instead of liquidation
in the wage scale. we have inflated |
the wage scale: instead OF lower
housing costs we are compelled to
maintain. IL not to increase, the pres
ent housing cost.
In this situation are the under
lying conditions right for run OF
sound business prosperity and have
they been such as to justify the bull
market Of the last six months? Isn't
the business revival largely in re-
Spouse TO the cry OF empty shelves?
II so. will the activity last?
And how about foreign trade?
with our high cost of production,
there is and can be no such thiDs
as foreign trade for America. except
in raw materials. in foodstuffs and
in certain specialties. Production
costs that make competition with
other countries impossible annihil
ate our export trade; and without
foreign trade what is the answer?
In spite of all this; in spite Of the
fact that general conditions have Z
not been right; in spite Of the seri-
Gus conditions abroad; in spite of !
the long drawn out coal strike; in
spite Of the disastrous railroad strike
security prices have gone steadily
up. until now they stand at figures
warranted only on sound economic
conditions.
But have we sound economic con-
ditions. considering our relations
with Europe in her financial and
economic distress. and considering,
in the large view. our own unrest
and our unsolved and unsettled prob
lens? And Is business generally .
coming back in dependable volume, ,
or is the revived activity merely ;
spotty? n
You may very well fancy that 1t ;
Is not altogether clear to me why
he rebound from depressing condi- d
ions OF eight months ago should 7
have come on so fast. No, It isn't #
clear to me. I question d