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Show EASTERN BANKER SEES BETTER AND BRIGHTER-BUSINESS DURING 1821 AS STABILITY INCREASES Charles H. Sab:n D:scusses Economic Conditions Surrounding Industries of Country, Declaring That There Is Much Latent Lat-ent Demand Which Will Become Apparent as People Realize That Recession Is Finished; Supply and Demand Indicate Good Future for Country; Sound Financial Situation Situa-tion Is Shown. PreeMeni Charle u Sabin of the Guaranty Trust conmB,ny of New York li decidedly optimistic about the out-1 look ror.1921, Ciit f prere'quieltee of active busi:ic?8 revival, he eays. aire pronipt completion of readjustment and establishment of such stabilize-( tjon in commodity prices as will bring lull utilization of our ehormQUS pro-' ductlve capacity, ilr -Subin eihpha-slzes eihpha-slzes the ColloWlng important facts: I nils country harvested in 1920 one of the largest crop's history i Transportation congestion has, been relieved and ouv railroad system i Is in a sounder ftnsnclal and opera;-i InK position- r We have passed through a pus-, idential election and are assun-d four, years of sane administration. STANDS RKDII STRAIN 4. Our banking system has wlth-j stood the greatest iredit strain In Its history and Is on a sound and workable lasls. 5. Accumulated surplus of five years of splendid prosperity is stored in manv ways for cmv continued use. 6. Markets of the world demand; our products, and a great mercantile! marine 1 prepared to transport them-1 7. This country has hot been over- built or over-extended in any under-j lying activities, and faces no program, of readjustment along these lines such as usually precipitates sustained economic eco-nomic ilnpressiou. X. We art in a sounder financial, industrial and political condition than I any other important nation. Mi. Sabln says. "The paramount need is stability in prices. In production, produc-tion, In consumption briefly in sup-; ply and demand. When retail prices firllj reflect declines p wholesale; pjrlcea b general buying movement vviiij Sttrelv develop, for Uiere Is a very! large unsatisfied domestic demand for xoods. Revival of uyin;- not on ev-. travagant scale, as following the ar- rnlatice, but commohsenac buying- wlUI move slocks of retailers, increase productivity pro-ductivity of manufacturers) and tlnv lilate business generally on a new and sounder basis. PREPARED I iR H IXQE, The readjustments w are experl-nolng experl-nolng began later than expected.! M m tar-Sighted hanking and business busi-ness Interests began to prepare for i l,em a vear and k half ago. and consequently con-sequently uidav have strong reserves. Surh ambipatton has tended tnaien- ally to cushion the reaction, and the rt-.tdjust mints ha - 'fi gradual The Industrial situation, on the v. hole, is, sound Only In a limited number of' lines Is there am fundamental or pro iiounced bVer-exxenstop. period of drastic decline in com-: modit) prices and accompanying business busi-ness liquidation Is always marked byj uncertalnt and slowing down of-business of-business puce general liquidation is under way the process must be com-i yleied before thei can be a general revival of activity. Wholesale prices, rose HO per cent from 1914 to tho peak In 1920. They are now more than 30 per cent above the 1914 level. I While there is no Inherent necessity I for return to pre-war prices even I possible the enormous increase in I prices during and following the war. Indicates, in some measure, the scope of downward reaction which was as unavoidable as it Will eventually be I beneficial. Our export iradc continued at highj U-wl throughout last year, dun large-; U to the fact that ss European coun-l progress In restoration of normal J industrlul i apaclt they require In-1 creasing quantities of American i-aw. materials and become better able lo purchase American finished products. The nation's industrial capacity Is now adjusted to a large export trade and It is urgently neceasaij 'hai this trade he stimulated In most effective manner. man-ner. If we. are to enjoy the full prosperity pros-perity of our present advantageous position makes pojslble The manner in wiitch our banking system has responded to Ihe needs of I American business Is a cause for grat-. Iflcation. Ranking credit was expanded expand-ed to meet the needs as they de.vel- ope, I. That tlic banks have co-opc-r-ated willingly with producers anJ traders and have been liberal In grant-Inn grant-Inn credit accommodation Is evldenp-l en by the extent to which loans in-j creased. But indiscriminate and In-; ordinate demands tor credit made II necessary to restrict credit accommodations, accommo-dations, in order to serve properly the requirements of essential industry. Interest In-terest rates were raised and effort, made to restrict credit to borrower.-! I collateral promised to retain . margin; ol '.ue under conditions ,' ' receding pi n es. 'Th. wisdom of the poiic has been demonstrated Condition! resulting from slowing down of business and I e marked decline in commodity prices have been successfully met "by trtr ' banks. Formerly such sweeping Indtia-trial Indtia-trial changes as witnessed in 1920 cuj- iLH ruinated in u ute financial disturb- IfijllB apce, followed bj pioiougcd business iii ILB depression. In this instance the bank as a whole, large due to elaslicjfy Of credit provided by the federal r. - 'H serve system and to their foresight In accumulating amp: n serve, hav -maintained ihur essential soundness: iH and strength "Since the most -rliical stage in're- LLV ; adjustment has apparently been pass- IH ed without impairment of financial jH mgchinery, there If adequate justify-! justify-! cation for confidence and for belicv- ) ing our banking Bystem will do us fun share m the ntovprneni to hasten - H Storstlon of norms,! busluess activit iH There Ii still a utti amount of work to be done. Qur railroad lines need unusual repairs ami equipment. Pub- lie utilities will require extraordinary amounts of matei ; i for rehabilitation We still much behind In our build Ing program ,nd H will probably be some years before 'be Bupply of struc tures is adequate to meet vhe demand Sooner or later these factors will re- iil lease an enormous demand for pnnui , materials. Moreover deferred buyfnj of consumers' goods gencrallv In an-ticipatlun an-ticipatlun of Still Lower prices. Is It- iH self accumulating a latent demsjxTcl which win also react powerfully upon commodity prices. ' The problem In its essentials is largely psychological. The latent de-! de-! inand of consumers will not become active until there Is confidence thai fH the downward movement of prices i has been consummated. l'neenncss Of recessions m prices and vxages dis-turbs dis-turbs the relative buying power of in-dllduals in-dllduals and groups. Those who- buying power Is reduced by one v.-i, tin revision of prices gain by succeed-I succeed-I ing steps. A Hh renewal of confi-Idence confi-Idence that the base of relative Stja-jbllU.v Stja-jbllU.v and equilibrium of prices have .been provided, business activity will be I quickened . I "To consider the present reaction 'anything but a temporary setback from ihe destructlori, inflation, - j travaganee and unsound economic conditions con-ditions of war is simply not to reckon 'I with realities. It remains true today. as It has since this country was firsi iscttled, that an-- man who sells he ! United States of America short Ii in the long run certain to lose. and. fui -I therm ore, any man who seeks to prp-fit prp-fit by circulation ol mis-statements' or 'false rumors, hoping to precipitate I further reactions, ahould ibe branded 'as a public enemy. I "This is the time for clear thinking and courageous acting, and in propor-;tion propor-;tion that such facuus arc brought bear will rewards follow when fH present reactions have run their ! ( |