The New York herald., 1922-10-05
NEW PARTY IS NEEDED,
LIBERAL-CONSERVATIVE,
SAYS FRANK A. MUNSEY
Publisher Analyses Present
Conditions, Radicalisn1 and
the Old Parties.

the Old Parties.
Frank A. Munsey yesterday ad-
dressed the afternoon session of the
convention Of the American Bankers
Association.
His, topic was Problems of the
Hour" The text of Mr.. Munsey's ad-
dress follows:
Mr. President and Gentlemen: Mr..
Lonsdaie's telegram Inviting me to
speak at this convention expressed the
belief that / might say something to
you that would be helpful to banking
and helpful to business. My discussion
of the business and industrial outlook
for 1922, published in THE NEW York
HERALD on the first day of the year.
seems to have been largely responsible
for the impression.
That forecast was substantially op-
timistic. This is as far as 1t went. The
basic conditions on which sound pros
perity rests were not yet right, but they
were improving. We had put twenty
months of retrenchment between us
and the wild orgy of initiation and
speculation of 1919 My purpose was to
show that we were making progress
toward better times, and that what we
needed was confidence. People never
get very far, never accomplish very
much, while enshrouded In gloom. Con-
fidence Is necessary to progress. but con-
f1dence governed by facts and sound
reasoning is the only confidence worth
while.
We are a mercurial people. We are
either up in the clouds or down in the
depths. When business Is good indus
tries arc humning, securities booming,
there Is no limit to our optimism We
are temperamentally incapable of seeing z
that the period of high pressure activi-
ties cannot go on forever And so, too
we are temperamentally incapable of
seeing any light and hope ahead when
we are plunged from the bright heights
of booming prosperity into the valley
of gloom. This does NOT apply to all
Americans. 1t does not apply to far
seeing. sound-reasoning men. but 1t Ia
true of the American people In the
large bulk.
One of the soundest pieces of work
ever done i'm this country one of the
most necessary pieces of work ever
done In this country. was done by the
banks in 1920. In calling halt to specu-
lation and reckless expansion.
the brakes as you gentlemen jammed
them on at that time. We were running
wild with wide open throttle: we were
running straight for a smash that
would have paralyzed the nation and
stunned the world, when, under the able
leadership of Mr.. w. p. c. Harding.
governor of our reserve bank system,
you warned the country that 1t must
Immediately begin slowing down. and
tAI ka
slowing down.
There was no other way to save the
situation. There was no other force.
not even the Government itself. that
could have saved the situation Indus
tries cannot run without money fuel,
business cannot function without money
fuel. speculation falls flat without money
fuel; and since the banks beld the
money of the country they alone were
in a position to initiate and carry
through retrenchment
In my January discussion Of condi-
tions this year. as in my January l dis
cussion of conditions last year,
painted no alluring picture of business
l saw no boom in the offing, and did
not wish to see one, for conditions were
not yet right.
What I wished to see. and regret that
we have not seen, Is a gradual but
costs and In distribution costs a gen.
eral liquidation In house rents and
other living expenses. With this liquida-
ton we should have sound foundation
on which to build business and to look
with justifia BILE confidence for good
run OF prosperity.
But instead of lower production costs.
we have gone to higher production
costs; instead of liquidation In the wage
Ia k..f
instead OF lower housing costs we are
compelled to maintain. if not to in
crease. the present housing cost
In this situation are the underlying
conditions right for a run of sound bust
ness prosperity, and have they been such
as to justify the bull market of the last
six months? Isn't the business revival
largely in response to the cry of empty
shelves? II so. will the activity last?
And how about foreign trade? With
our high cost OF production. there is and
can be no such thing as foreign trade
for America, except in raw materials. I'm
foodstuffs. and in certain speclalties.
Production costs that make competition
with other countries impossible ami
hllatc our export trade and without for
eign trade what Is the answer?
In spite OF all this: In spite OF the
fact that general conditions have not
been right; in spite of the serious con-
ditions abroad: In spite OF the long
drawn out coal strike: in spite Of the
disastrous railroad strike, security prices
have gone steadily up. until now they
stand at figures warranted only on sound
economic conditions.
But have we sound economic condi-
tions. considering our relations with
Europe in her financial and economic
distress. and considering. in the large
view, our own unrest and our unsolved
and unsettled problems? And is business
Continucd IN Pare Eleven.