BETTER TIMES AHEAD

Sun (Auckland), Volume II, Issue 590, 16 February 1929, Page 12

BETTER TIMES AHEAD

TREND DURING 1928 bank chairman looks back That there was a world-wide trend toward better times and improved industrial and financial conditions throughout 1928, is indicated in the annual .address to shareholders of the National Bank of Commerce, New York, by the chairman, Mr. James S. Alexander. The address is of particular interest in its reference to industrial affairs in the United States.

“The year 1928 has witnessed the continued progress of the world toward financial stability,” states Mr. Alexander. “This progress was indicated in France by the legal stabilisation of the franc, and the return to the gold basis; in Great Britain by the amalgamation of the Treasury and Bank

of England notes; and in the world at large by important gold movements which worked toward a more nearly normal distribution of the world’s monetary gold stocks. Since September, 1927, the gold reserves of Germany, France, Italy and several other

countries have been notably augmented. Concurrent with the further accumulation by these countries there has occurred an outflow of some 500 million dollars of gold from the United States, a development which had long been anticipated and which, viewed in its largest aspects, is in the interests of world stabilisation and of sound credit conditions both here and abroad. The gradual movement toward financial stability in South America, which has been under way for some time, has continued. Conditions in Europe “The broader economic and political trend in the world at large has been, on the whole, satisfactory. The indications are that, barring a few j notable exceptions, employment, production and the volume of international trade have been fairly well maintained. World crops have been fully up to normal. While there have occurred some internal political disturbances in Eastern Europe, generally speaking, social and political conditions in Europe have -been encouraging. In International political affairs the year has been characterised by continued effort on the part of the several nations to work toward greater comity. “Two specific economic develop- | ments of the year are of international

significance, the abandonment of the Stevenson Act with respect to rubber control, and the removal of restrictions in the Cuban sugar industry. These actions have opened the way 1 for the operation of these industries under more nearly normal competitive conditions. The foreign trade of the United States continues to develop in a thoroughly satisfactory manner. During the ten months for which figures are now available our export trade in 1928 increased 3 per cent, over the corresponding period of 1927, and our exports of finished manufactures, 12 per cent. Our merchandise balance of trade was in excess of 600 million dollars. These developments give added evidence of our ability to meet foreign competition in the world’s markets. * U.S.A.’s Economic Situation “In many ways we are in the soundest economic situation that we have occupied since the war. Our national income, which is our buying power, is very large and widely distributed. Employment and wages remain high; and with few exceptions we are singularly free from labour difficulties. As already pointed out, the outlook for agriculture is improved, and our foreign trade is being well maintained. “The position of American industrv with respect to organisation and finance is generally sound. While there still exists excess of capital equipment in some industries, and in others there has been a tendency to over- expand, generally speaking, the increase in our equipment has been in response to new business or in an effort to replace older equipment with more efficient. The general effect of our increase in capital equipment for the last several years has been to reduce per unit costs in production. There is an indication that, broadly speaking, business organisations are watching their markets closely, and that in the aggregate there has occurred no significant excess accumulation of stocks of goods. In numerous industries inventories are low. For a number of years there has been occurring a rather pronounced movement toward consolidation in industry; and many smaller units have been absorbed by stronger groups. The general movement has been toward the elimination of smaller units. Partly as a result of competition between the larger and the smaller units, the number of commercial failures has increased every year for a number of years. It is to be noted, how- , ever, that in the year 1928 the total ; liabilities in connection with commer- ! cial failures have run somewhat under the year 1927. There is nothing in ; our record of commercial failures to ; cause important concern. On the contrary, concentration of industry

has worked toward a generally stronger position, and the larger units have notably strengthened their cash positions.”