Bankers' Outlook

Mostly by proxy, in many cases by person, last week stockholders of national banks attended their annual meetings. Most significant meeting of all was that of the biggest bank, Chase National. Proudly, stockholders heard that their institute's resources now total $2,697,000,000, the largest sum ever attained by a bank and $753,000,000 ahead of the nearest U. S. competitor, National City Bank. Befitting the meeting of the biggest bank, the No. 1 U. S. Banker, Albert Henry Wiggin, addressed stockholders on problems other than those pertinent to Chase alone.

Salient Wigginisms included:

Tariff. "The most serious of the adverse factors affecting business is the inability of foreign countries to obtain dollars in amounts sufficient both to make interest and-amortization payments on their debts to us and to buy our exports in adequate volume. From the middle of 1924 to 1929 we delayed the adverse effect of our high tariffs upon our exports by heavy buying of foreign bonds. . . . Our alternative today is. therefore, either a reduction of our tariffs, or readjustment to our greatly reduced volume of exports. ... A reduction in tariff, made in the interest not of change but of stability, would still leave us our general protective tariff system."

War Debts. "Cancellation or reduction of the interallied debts has been increasingly discussed throughout the world. This question has an importance far beyond the dollar magnitude of the debts involved. ... I am firmly convinced it would be good business for our Government to initiate a reduction in these debts at this time."

Prices. "We attempted, as a matter of collective policy, to hold the lines firm following the crash of 1929. . . . The policy has had a 13 month test. It has failed. . . . We must keep the markets open and the prices free."

Wages. "It is not true that high wages make prosperity. Instead, prosperity makes high wages. . . . Many industries may reasonably ask Labor to accept a moderate reduction of wages designed to reduce costs and to increase both employment and the buying power of Labor."

Stocks. "I do not know whether we shall see lower prices in the stock market or not. . . . There are many securities, both stocks and bonds, which are now selling for less than they will be worth in normal times and at prices which should prove attractive to the investor."

Prophecy. "It is not impossible to set a date for the beginning of the business recovery. I think that we are approximately at the worst of the Depression and that the next important move will be upward. ... I expect conditions at the end of 1931 to be a good deal better than they are at the end of 1930."

Warburg. To the directors of Manhattan Co. and its banking units, last week Paul Moritz Warburg presented his views. For having denounced the speculative orgy of 1929 and predicting its inevitable end (TIME, May 19), shrewd Banker Warburg gained a reputation as a good prophet, has not lost it by premature optimism. Last week he called the business cycle "a subject for psychologists rather than for economists," said the Government could serve a better purpose by squashing booms rather than vainly attempting to halt depressions. He too denounced tariffs, artificial attempts to fix prices.

Prophecy. "From the banker's point of view," said Mr. Warburg, "I do not hesitate to say that within a few years hence the level at which some of our securities sell today will look . . . incomprehensibly low . . . even though one might anticipate a year or two of reduced dividends."

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