Show BUSINESS FORECAST FOR 1922 by the national bank of commerce new york conditions in the united states today indicate that the year year 1922 as a whole will be more satisfactory to business than ihan the year just ended our forecast is that profits will depend more on economy of operation than on expansion of volume with the many favorable factors now operating business men should not fear to make plans for the new year but they should plan with care and conservatism and with constant effort toward reduction of costs financial improvement continues progress has been made in reduction of excess stocks of manufactured goods accumulations of raw materials have been reduced the rate of production in the major industries has shown little change during Z the closing 6 weeks of the year losses in some lines have been offset by gains in others the net result being that the b gains over the low level of the earlier months of 1921 have been held banking position the last twelve months have witnessed great progress toward stable financial conditions in business combined gold reserves of the twelve federal reserve banks have increased by more than 40 per cent while discounts for member banks have dropped 56 per cent and federal re serve notes in actual circulation have declined 28 per cent the he federal reserve system once more proves to be a stem designed to care for increase and decrease in the volume ume of credit with the requisite elasticity to do this basit easily y the e betterment in the position of member banks while not so 10 st king biking is nevertheless satisfactory notwithstanding ding the consistent improvement in financial conditions recovery in manufacture and trade has be been slow ow unemployment in the chief countries shows little decline from froin the high point reached early in the year and ait it may well reach new high b figures Z during january and auary ru ary when normally the there re is is an increase in in the number of 01 those out of work in north america and europe man actu red goods continue to move move slowly and u uncertainly into TO the channels of consumption the raw material problem in last analysis the business of the world rests on a physical physical not a financial foundation failure of balance be worldwide world wide supply of and effective demand for cal goods forced the violent readjustment of the last t two wo I 1 years a readjustment which will not be coin complete until this physical PhY lical balance has again been established the wool situation illustrates particularly I 1 arly well the various arious factors which have prevented a return to normal editions conditions it has continued to accumulate partly because central europe has not been able to purchase in the exacted amounts partly because an important part of the cool inn 0 supply y is a byproduct by product and partly because the build ing b ulof flocks is so slow a process that flock masters re duce them only when they have given g iven up hope of profits with curtailment of production and increased demand copper stocks are showing reduction the short american and egyptian cotton crops have served to bring the worlds cotton supply approximately to a prewar normal stocks of hides and skins are large 6 in man many y countries but are moving in more freely into consumption the prices of rubber and sugar are still below the cost of production sisal stocks carried over from last year now constitute nearly two thirds of a normal years supply the worlds wheat production is in a satisfactory state of balance in that there is is an adequate supply and a sustained demand the american farmer in the face of a new corn crop of bushels is carrying over bushels from the record crop of 1920 there is also an accumulation in other less well wel l known commodities this accumulation of physical goods is not a misfortune it assures to the world a supply of cheap food and clothing and real prosperity has never rested on any other basis but pro producers lucers of raw materials constitute much than half of the buying power of the world and the is inevitable that the entire economic structure will gradually adjust itself to the raw material market disarmament and the economic outlook the essential step toward recovery is removal of the durden burden of expenditures for war the countries which are wasting their money and effort on armaments are those whose markets must absorb the worlds excess of raw materials and pay for it with manufactures the terrific burden of war debts and preparation for war is clearly shown by data recently prepared by the federal reserve board the board states that in 1920 of a total net public expenditure by great britain of f 1145 per cent were for public debt charges and per cent were for national defense by france of a total of francs per cent were for public debt charges es and per cent were were for national defense defence in III 1 1919 italis total public expenditures were lire f f which 84 per cent were for public debt char charges eb and cent for national nati onil defense ilse german expenditures in ill 1920 were marks per cent bein being for public debt charges and per cent for national defense expenditures for the payi payment nent of interest and principal of the public debt do not curtail current purchasing power they merely transfer it that curtailment occurred when in the first place the debts were incurred for military arv and naval purposes but current expenditures for national nation al defense constitute a direct levy on the present purchasing I 1 powers of a people labor expended to make guns and su submarines can not pay for hides from argentina b or wool from Ati australia stalia it is too much to hope to destroy the anachronism of armament at one blow but in so far as concrete results may be attained they offer the first real hope of recovery from the economic stagnation of the world A combined saving by the united states the united kingdom and japan on armaments of only in a single year is is equivalent to the prewar value of the exports of wool from boa bot argentina arg entina and australia for nearly three years |