Evening star., 1926-12-10
Prophet of Prosperity.

Il : unavoidably the function Of
The ecretary of the Treasury to
serve in the role of prophet He
NUT n his annual and occasional
rer.t-- On the condition of the
ustisc=' finances undertake to fore
tell tr future just as any manager
% ~ .UIlstry must look forward to
20 T. II inc the prospects of busi-
ness trade. He must discount
The Vi ure." Otherwise ne cannot
Judge as to the needs Of revenues
ar wisdom of expenditures.
Sere-sry Mellon in his latest re-
per. lu,e ring the fiscal year 1925-2G
ur@a.- tfs this role of prophet for
tte flat year to come, and he
81 the country in terms of
ercnure ,ment and assurance. The
N.nis ne says, has attained a
rec eel of income and faces the
Pre-" Of a continued high tide of
pro- :. He says that the domes
tic si''' ton is such that 'we can
look =. ard to another satisfactory
prosperity is the "broadness of it's
base; While spending has increased,
so have savings accounts, life in
surance writings and the purchase
of sound securities by small in
veStors
National prosperity would be en-
dangered if the Nation We're spend
ing without saving and conversely If
It We're saving without spending.
Tho two must go together to insure
a healthy economic condition. The
savings, notes the Secretary, take
three forms-bank accounts, insur
ance policies and sound invest
ments. All of this money is put to
work 1t flows into circulation and
makes for continued industry and
trade 1t is not boarding such as
happens in time of financial distress
and panic, when cash is hidden and
kept idle, when spending slackens.
mills close, shops fail business is
stagnant and unemployment is
general.
It is to be noted that in his report
Secretary Mellon indorses the prin-
ciple of installment buying which, he
says, is no menace if the article pur-
chased has a real and permanent
value and if the payments are not
made too light in an effort to stimu
late consumption in times of declin-
ing demand. On this point there is
some dispute. Warnings have been
uttered lately against installment
buying a. n dangerous feature of the
economic situation. Secretary Mel
lon, with the reservations mentioned.
holds 20 The contrary and regards
some stimulant to trade and safe
method Of disbursement.
To TIE man in the street" the
average citizen, these passages of
Secretary Melons report are of more
significance man his discussion of
foreign. debts. There is a natural
disposition to regard the present era
OF prosperity as certain to be fol-
lowed by a period of depression.
That has happened in the past and,
s,rguc many people, it is certain to
happen in the future. But there is
10 economic law that determines the
succession The So-called cycle of
economic balance is not periodic, nor
is il inevitable. y great disaster
such as Il war may precipitate re-
action. UTnsound conditions may
develop through initiation or over
speculation. Business failures may
occur by spontaneous process of
coil2 oSinp confidence. But in a
country of such varied resources as
the United States, especially with
the fundamental principles Of eco
nomic administration so firmly es-
tablisii ed as they now are, there is
nc reason to fear any automatic
decline after period of good times
as a natural or an inescapable
sequence.