The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-06-01
SEES BUSINESS
DEPENDENT
ON CROPS
Little Danger of Initiation
Shortening Prosperity.
Says Chicago Banker.

Says Chicago Banker.
BY GEORGE r. MCINTYRE.
Financial Editor Chicago Evening
American.
written for Cosmopolitan News
Service.)
CHICAGO, June What is, in
flation as applied to our business
life?
Is business in this country in a
state of initiation today?
Is our present business prosperity
in danger of being shortened
through initiation?
These three questions were put
today to John j. Mitchell, veteran
banker and president of the Illinois
Merchants Trust Company, which
may now be regarded as the third
largest bank in the United States.
Imitation might be termed bust
ness gone mad" said Mr.. Mitchell.
Means Business Expansion.
I'm it's broad sense it means a
business expansion, planning and
preparation for future business far
in excess Of current needs.
II have no patience with the
croakers who are constantly shout
ing that, business is inflated and
predicting disaster and a great re-
action as a result. We may in
time have reaction, but it will
not be due to business initiation,
though there will not be lacking
financial wiseacres to say so. Az
well say that night comes because
Of overexpansion of daylight.
1.-THE mistakes made in one gen.
grafton oro Ysonoofad IN
the next, but the generation that
passed through the inflated and
reactionary period after the war is
the same generation holding the
reins Of business today. On the
prin tsle that burned child breads
the fl hey are not going to re-
peat the> stakes during this era
Of prosper,
Industrial dfe today merely is
trying to supply current needs and
in many cases is far behind them.
No effort is made to anticipate the
future. This condition equally APP
plies to the mercantile trade both
wholesale and retail. There Is no
effort to pile UP enormous stocks
but merely to keep abreast of the
business tide.
"As a consequence, there are no
long time loans in the banks. Sixty
and ninety days are the limit.
both mercantile and industrial
life.
Banks in Chicago and elsewhere
throughout the country have no
excess frozen credits. Moreover they
are keeping an unusual amount of
liquid assets on hand. Furthermore
the banks have a lagre amount of
demand loans which can be quick
ly turned into money.
Large Reserves In Banks.
ALSO they hold large reserves in
the Federal banks and are making
no effort to cut them.
Stocks are said to have been
greatly inflated but as matter of
fact they are really no higher now
than a year ago.
coil stocks certainly have not
been inflated and many Of them
have not reached the high mark
the earnings and dividends would
indicate. Right here / should like
to say that the recent reaction in
oil stocks, contrary to popular
notion, has not been due to any
battle between the Stand Oil group
and the independent oil operators in
cutting crude oil prices but simply
to the enormous output from the
two California fields, which are
turning out around 100000 barrels
a day and shipping it East.
1.-THE statement that the dollar is
really worth only 65 or 20 cents to
the consumer in making purchases
and that for this reason prices are
inflated, is fallacious reasoning.
High prices today are not due so
much to initiation as to higher pro-
duction costs and greater-demand.
The dollar, during and after the
what could have been bought for
So cents before the war. The
dollar has practically doubled in
value since that time.
1.-THE labor market Is not in
flated, Secretary Hoover estimates
the labor shortage IN this country
as 100000 men. European coun-
tries have not been rushing over
even the number they are permitted
to send.
Building Not SIaclxened.
Building construction has not
slackened through initiation, but
owing to the high cost of material
and of labor.
There is little danger Of IN
flation shortening our prosperity.
If a reaction comes, it will be due
entirely to the fact that all pros
perity goes in waves, and the de-
mand in all lines having been
satisfied for the time, slackening
off ensues.
"The continuance Of our present
prosperity, in my judgment, will
largely pivot on what this years
crops are to be and what the
farmers are to get for Them