Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1922-04-28
The Need for Capital

A return to normal business &C
tivity may be expected to cause two
capital movements Of extraordinary
interest. Not only win some cor
porations, now holding their idle
working capital in the form of Gov
eminent and other securities, be
compelled to market their holdings
but other corporations with i'm
paired working capital must float
new Issues in order to provide nee
essary capital equipment in the face
of the present shortage. according
10 DR.. Henry A. z. Chandler. econ
onist of the National Bank Of Com
merce in New York. II these two
security movements occur stimuli
taneously, he adds. somewhat
acute shortage OF investment funds
may follow.
Not only must the United States
supply new capital for its own
needs. Doctor Chandler declares in
the May issue of Commerce Month
~, the banks magazine, but the
buying capacity Of the rest of the
world must depend upon Americas
sharing It's future capital accumula-
lions with Europe.
@rhe capital problem is a world
problem. and we cannot correctly
estimate future movements Of cap
ftal in the United States without
viewing our own special capital sit
uation in the light of that of the
rest of the world" he says. Not
withstanding our large profits in
1915 and 1916 and important extern
sion in manufacturing capacity In
specific industries during the war
he points out that the naldistribu-
ton of capital in this country and
the gigantic reduction of fixed cap
itai equipment in Europe has left
the world with a capital equipment
very inferior to that OF the pre-war
period.
Doctor Chandler questions the re-
liability of recent apparent evil
denoes OF large capital accumula-
lions in the year 1921. While recog-
MIXING that some capital accumula-
ton always takes. place, even in pc
RODS of depression, he believes that
much Of the recent evidence Of large
loanable funds during the last eight
cen months Is but an Indication
a shifting OF capital funds, and that
so far as the sum total Of physical
capital Is concerned the presence Of
funds in the market is largely due.
to liquidation OF stocks of goods
which, to not uncomfortable ex-
tent, means final consumption Of
goods and in part represents a re-
duotion IN tho actual physical cap
ital of the country.
After examining all of the avail
able evidence with regard TO the
condition OF both fixed and liquid
capital in Europe and in this coun-
try, however, It is impossible 10 be-
| lieve that the capital situation pre-
sents anything like the satisfactory
! appearance that superficial market
indications have suggested to some.
While recognizing the important re-
adjustments that have taken place
both in Europe and this country
within the last two years. there APP
pears TO he abundant evidence that
the world still faces a tremendous
shortage Of capital.
IF this conclusion is correct, we
must look forward TO a greatly in
creased demand for capital whom
ever business approaches at all near
to normal volume. In the return
of such a normal demand, idle
working capital now invested in
Government and other securities
must. in part a tleast, return TO en-
large inventory. Moreover. other