The Cordova daily times., 1922-05-20
SATURDAY, MAY 20, 1922
THE NEED FOR CAPITAL

rotnrn to normal business activity may he expected to cause two capltal lnov of extraordinary interest. NoC only WILL corporations, now holding thelr 1ole won h'i7 canital in the form of government ana oIi,el securities, be compelled to market tleli noiN mos, but other corporations Wlth lnlp"hiou working capital must float new issues Ill ol t1el W +o provide necessary capital equipment LII % rhl face of the present shortage, accorulng 'o M Henry A. E. Chandler, Economist oI Clle NC pc tional Bank of Commerce III New 1orh. Ah +hese two security movements occur sllllui'''h c eouslv. he adds, somewhat acute shortage oi investment funds may follow.
 Not only must the United States supply new canita] for it's own needs, Dr. Chanolef ue- clares in the May issue of Commerce MohVl- 1n tho hanks magazine, but the buylng Ca nacitv of the rest of the world must depeho npon America's sharing its future capital ac- cumulations with Europe.
 "The capital problem is world problem and we cannot correctly estimate future move ments of capital in the United States Wltll- ont viewing our own special capital sltuatloh LII the lioht of that of the rest of the world, He saws. Notwithstanding our large proflts Ill 1915 and 1916 and important extension Ill manufacturing capacity ln specltlc lndustrles during the war'' he points out that the mai distribution of capital in this country and the gigantic reduction of fixed capital equipment in Europe has left the world with a capital eoninment very inferior to that of the pre- war period.
 Dr. Chandler questions the reliability of re- cent apparent evidences of large capital ac- cumulations in the year 1921. While recoS- nizing that some capital accumulation always takes place, even in periods of depression, he believes that much of the recent evidence of large loanable funds during the last eighteen months is but an indication of a shifting of capital funds, and that so far as the sum total of physical capital is concerned the pres ence of funds in the market is largely due to liouidation of stocks of goods which, to a not inconsderable extent, means final consump- tion of good and in part represent a reduction in the actual physical capital of the country.
 "After examining all of the available evi- dence with regard to the condition of both fixed and liquid capital in Europe and in this country, however, it is impossible to believe that the capital situation presents anything like the satisfactory appearance that superb cial market indications have suggested to some. Wn1le recognizing Cue lnlpoI ldlC Iedu- iustments that have taken place both in Flu rope and this country within the last two years there appears to be abundant evidence that the world still faces tremendous short age of capital.
 eff this conclusion is correct we must look forward to greatly increased demand for capital whenever business approaches at all near a normal volume. In the return of such a normal demand idle working capital now in- vested in government and other securities must in part at least return to enlarge inven- tory. Moreover, other corporations with i'm paired fixed and working capital will find it necessary to float new capital issues. If these two sets of securities are placed upon the market at about the same time it should not be surprising if a somewhat acute short age of investment funds should appear.