The New York herald., 1922-01-02
1922
What Will 1t Mean to Us?


1922; there is nothing gloomy in sight for 1922
1921 has given good account of itself in carry
ing on the great work Of deflation initiated IN
1920. 1919 hit the sky in reckless expansion,
reckless speculation and reckless spending.
When 1920 set its feet squarely against all this
the shock to business and to the country was like
that to the passengers on fast speeding train
when the air brakes are suddenly and savagey
jammed on.
In its strong, decisive action 1920 paralyzed in
dustry, 0bliterated speculation and spread gloom
everywhere. Ingenious finance crashed to earth In
day. tangled, unrecognizable mass OF avarlce
The mutterings of despair, the cries OF broken
hopes and broken fortunes rang throughout the
land
But 1920 never wavered. It's business was to
save America from industrial, commercial and
banking collapse. 1t went straight on with It's
work of deflation to the end of its days.
Then its successor, 1921, shouldered the burden
and, considered by and large has made good job
Of it. If it had succeeded in debating the wage
scale there would have followed automatically
deflation in transportation costs and in all costs OF
living. House rents and coal and light and food
stuffs and wearing materials would have got back
to pre-war prices
its failure in respect of the wage scale alone
robs 1921 of the glory of genius. If only it could
have succeeded in bringing labor costs back to
normal, industry everywhere would have sprung
into activity and general prosperity would have
gladdened the entire country.
But while failing to achieve all we could have
wished for it 1921 is entitled to great praise and
great honor for disasters averted and for gen
orally cleaning up the debris of the wreckage OF
1920. 1t reestabshed our big banking centers on
sound basis, and this. in the overstrained condi-
ton resulting from the 1919 orgy, was big piece
Of work.
1921 wrote down and wrote off frozen credits
in the big fields, disposed of vast stocks OF mer-
chandise that it's predecessor failed to move, gave
us easy money at reasonable interest rates and so
stabilized our point of view that in large measure
we have readjusted ourselves to life in the valley
L v<, ooy0n ny1d
sounder realization of the philosophy and eco
. nomcS of life.
1922 takes up its work under conditions enor-
mously more favorable than those is predecessor
had to face. The dangers that hulked big year
ago in the eyes of those who knew. no longer
exist. The life blood of commerce and industry and
business is money A year ago our big banks,
the mainstay of our economic life, were stagger-
ing under colossal burdens. Whether they would
carry through or not, whether they could carry
through or not, was the problem that disturbed
the Government and the men on the inside OF the
overstrained situation.
Industry was stalled, incomes were dwarfed and
shriveled, but the Government had to have money
and the bankers had to furnish it. Manufacturers,
merchants and shippers had to have money and
the bankers had to furnish it. Interest on rail-
road bonds and all other bonds and on mortgages
had to be paid and the bankers had to furnish the
money to meet these payments, The building
trades had to have money, the cotton growers had
to have money and the vast farming industry had
to have money and the bankers nad 10 1urnlSn IT,
Payrolls in the industries had to be met and all
other payrolls had to be met, overhead expenses
had to be met vast taxes had to be met and the
bankers had to furnish the money. Overextended
enterprises had to be carried by the banks. Frozen
credits and slow credits, the inevitable frutage of
the wild plunging and spending of 1919, had to be
continued and the bankers had to carry the
burden
In this situation and with wide aggregation of
weak and dangerous spots in our financial, indus
trial and business structure that came to loom
large the outlook in the trying months Of
trenchment did not make for optimism except that
grim optimism which stands calmly buoyant and
immovable in actual danger. 1t is a heroic and
magnificent piece of work the American bankers,
with the help of the National Reserve Bank sys-
tenn have done in crisis that threatened an In
comparable catastrophe.
But all this is behind US and 1922 finds condi-
tions in the large sense calm and the American
people hopeful and mildly optimistic. There is
every reason for being calm. There is reason
for concern and there is reason for optimism
that keeps its feet on the ground
But we are not going to have in the immediate
future a magic awakening of business. We are
not going to have general boom in activities.
We are not going to have sudden return to SEN
sational speculation. The underlying conditions
though in the main sound do not warrant it, do
not indicate it.
That we shall have better business in 1922
than we had in 1921 may safely be expected. The
country is financially sound to-day. The country
has plenty Of money to-day for its activities and
to spare. Interest rates are moderate and
stantly trending lower Liquidation, except in
wages has done its work.
There is no overprOduction. The shelves of
merchants are understocked rather than over
stocked Warehouses are not filled with goods.
Two years of economy with the American people,
two wears of watchfu careful buyinQ have worn