The New York herald., 1922-01-02

hold equipments In this situation and in the very
nature of the case there will be better and wider
demand for products Of the American loom and
the American workshop than merchants have been
called upon to meet since the ak struck at the root
OF Initiation two years ago.
This greater demand for goods will give work
to many men and to many women who are now
idle, and as they again become wage earners they
will add to the purchasing power Of the country
and so in turn will make additional work for
themselves.
Considered in this respect the better business
in sight is largely in response to the desire and
necessity of replenishing wardrobes, repenishng
household equipments, the construction OF new
habitations and the rehabilitation OF old habl-
tatons
Approaching the markets in this way with de-
pleted pocketbooks, and still under the spell of
economy, the American people are not going to
get gay in minute and buy everything in sight
On the contrary, they will buy cautiously, wisely
and as they should buy.
This kind of demand on the part of American
purchasers alone, though large in the aggregate,
never gave us business boom and never will.
Business booms come from foreign buying and
general American opulence supplemented by an
era of speculation and lavish spending.
We are not going to have the foreign demand
for our products which in addition to our domestic
demand would keep our industries working at
high pressure. We are not going to have the Tor
eign demand for the reason that with our present
cannot compete in foreign markets with the prod
ucts of our foreign competitors.
So long as the American wage stands greatly
in excess of the foreign wage just so long for
eign markets will belong to foreign producers.
Our cost Of production, except in certain raw
materials and in certain foodstuffs, is now so
high with present transportation costs due in
turn to the high wage scale that American goods
are generally shut out from foreign markets.
This means with present cost OF production that
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concerns foreign trade, just long our cost OF
production is in excess of the cost OF production
in the big producing countries that reach out for
world trade.
sound sane reduction in the wage scale with
4 return to genuine efficiency, the spirit of giving
full measure work for the wage received would
speedily force open the doors of foreign markets
to America. They never will be opened to America
until American prices are right.
An active bond market is usually the fOrerunner
of an active stock market and an active stock mar
ket il generally followed by active business.
From the fact that the last half of 1921 gave
us a buoyant, booming bond market We must not
assume that we are on the verge of wide specua-
tion should think it fairly safe prognostice-
ton. however, considering all that enters into and
has bearing on The situation, that Wall Street is
reasonably sure to take on considerable awak-
enng before we get far into 1922
This does not mean wild price imitation wild
speculation. And it does not mean an inundation
of new hotatons. 1t is my guess that worth
while securities likely to share in the upward
trend of bonds. This should be particularly true
of issues now selling below their value, and their
value determined by the most thorough investga-
tion of the properties represented by stock issues
That the general public is wholly incapable Of
determining values is certain. No one not himself
Judge Of values should put money into stock
issues except those that are known to be sound
through and through The general public would
show great wisdom in ccnfining it's investments
to Government or other sound bonds.
| am DEPRESSING from the subject under consid-
Grafton solely with the purpose of cautiOning wage
earners and others who have no right to leopard
ize their money by putting it into speculative
securities except on the advice OF men of seasoned
Judgment on security values
Though the conditions generally favor better
business and better security values in 1922 than
1921 gave us, there are still too many cross cur
rents tending to neutralize advancement to justify
a very robust optimism
The Transportation situation stands out boldly
as an instance of vast unsolved problem, perhaps
unsolvable whose roots rur deep into our entire
financial and economic structure. If this were
cleared up and so cleared up as to give confidence
to investors, cleared up as to give us right
transportation rates, so cleared up to give us
the safest and hest railroads in the world. so
cleared UP as to get the people of the whole
country back of their railroads, in jealous support
of their railroads, the banking situation would be
clarified and the price Of all sound securities
stabilized.
Until the railroad situation is made right and
until the wage scale is brought down to right
basis see no great run of brilliant prosperity
ahead We are sure of one or two Fundamental
facts, however. One of these is that we are not
now lowering over powder mine. Another is
that there is nothing in our situation that cannot
be cured by honest work and plenty of it.
Anation grows into strength or falls into weak.
ness in accordance with the measure of its peoples
productive work.