The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-01-04
Banking Position.

Banking Position
The last twelve months have Wit
messed great progress toward stable
Enancial conditions IN business.
Combined gold reserves of the
twelve federal reserve banks haze
increased by more than 20 per cent,
while discounts for member banks
haye dropped Sc PEI. cent. and fed
eral reserve notes in actual circula-
rlon have declined IS PEI. cent. The
federal reserve system once more
proves so be a system designed TO
care for increases. and decreases
Z ii the volume OF G edit. with the re-
siifs:te Z. elasticity to sloihis easily.
eTr.sa bettermen.t in the position Of
isfe1nper banks. while not so
ssrikIRg. IS ncser.heiess satisfac-
Notwithstanding the consistent
inaprosenaen. in financial ccndi-
lions. recovery in manufacture and
trade has been slow. Cnen}ploy-
l..anI in the chief countries shows
IsstIe decline from the high point
reached early in the. year, and it
sss;sy well reach new high figures
turing January and February,
hen normally there is an increase
I Is ..he, number Of those out of work
ia North america and Europe
aIanlfaetured goods continue to
Elcye slowly and uncertainty into
tie channels Of consumption.
The Raw Material Problcm.
In last ANALYSIS, the business of
The World rests on a physical, not a
financial foundation. Failure os
balance between worldwide supply
OF and effective demand for ply
sscal goods forced the violent read
sssis1ment oe the last two years; a
ssadjust tn1ent which Will not be
complete until this physical balance
has again been established.
- ;TThe wool situation illustrates
aayaicEsariy well the various, fac
tors which have prevented a return
TO ormal,eondltions- It has con-
sinued to accumulate, partly be-
eease central Europe has not been
able to purchase IN the expected
:lpsounsa, partly because an I'M port
ant part OF the wool supply is q by
product. and partly because the
building up OF focks is so slow a
pr0eess that aoek-maseers reduce
fhem only axiaen they have given UP
hope Of profits.
With cnrsaiment of production
ard increased demand copper
stocks are showing reduction. Tae
shert American and Egyptian cot
soE, cropsshave served to. bring the
N0rids cotton supply approximate
AZ to prewar normal. Stocks of
hides and skins are large liz many
countries but are moving more
freely into consumption. The prices
of rubber and sugar are stiH below
The cost sof production. Sisai stocks
carried over from last year now
constitute nearly two-thirds of
normal gears supply. The worlds
yyheat production is in satisfac-
tory stare Of balance in that there
is an adequate supply and sustain
ed demand. The 4in.erican farm
er, IN the face of q new corn crop
of 3.Ias. 600 .000 bushels. is carry
Hsg over 2S1.0eo,ca0 Bushels from
the record crop Of 1920. There is
also an accumulation in other legs
sef1-known commodities.
This accumulation os physical
goods is. not 8, misfortune. 1t as
Sures TO the world supply of cheap
food and. clothing, and real pros
perity has never rested on any 9th
er bass But producers OF raw ma
teriaE constitute much more than
half Of the buying power CT the
world and tae conclusion is in
eyitabie that the entire economic
struefnre viii gradually adjust it
self 70 the raw material market.
nisarnaament and The Economic
Outlook.
The essential step toward recov-
: cry is.renloval of the burden of ex-
pendrures for war The countries
which are wasting their money and
effort on arma0entS are those
whose markets must absorb the
worlds excess of raw materials,
ard pay for it with manufactures.
The. terrific burden of war debts
and PREPARATION for war is clearly
showS by data recently prepared
by the federal reserve board. The
boarasstaees that in 1929. of q total
net pabhc expenditure by Great
gritain of Il, l45. .92S,o0o. 3o.5 per
cent. We're for pubic debt charges
and 25.5 percent were for national
defense; by France, of a total Of
52.IS3.217.000 francs. 81 per cen;
we're for public debt charges, and