The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1916-01-07
.Rusiness and Finances
By W. S. Cousins, Editor The American Banker

maintain their own resources in a
strong and liquid condition and pre-
pare themselves to assist member
banks in every legitimate and neces-
sary way. Member banks, however.
can not expect the Federal Reserve
Banks to act as substitute for,
soundness and conservatism on their
own part. With the use of sound
business judgment and with the gen
eral acceptance of the present situa-
ton all over the world as temporary
aad transitional the United States
may look forward with confidence to a
substantial continuance of lis present
prosperity and to successful prepare
ton for any changes thar may come.
FREDERICK E. FRANSWORTH
General Secretary American Bankers
Association: In the partial restora-
ton of business activity nothing has
played more important part in the
last year that the Federal Reserve
System. That system is as yet far
from the state of perfection to which
it is hoped it may ultimately develop
but it has had notable effect in
stabilizing conditions and maintain
ing the public confidence by giving
the commercial banks insurance
against currency famine. The fact
that the facilities of the Reserve,
Banks have not been extensively used
or that the amount of rediscounted
paper has been so small that some
of the banks have not earned their
expenses does not alter the fact that
bankers have felt safe during the
whole period despite the influence
that the war in Europe has exerted.
JAMES B. FoRGAN, President
First National Bank, Chicago, ILL.,:
During the first nine months of the
year general business dragged, only
such lines as were stimulated by
manufactures for export showing ac-
tivity on profitable basis. Domes-
tic business was irregular or "spotty.
and lacked buoyancy and volume.
During the last three months, how
ever, general business has shown I'M
provement in practically all lines,
creating a somewhat better demand
tor money, and the prospects are
good for further Improvement all
along the line. Gold continues to ac-
cumulate, however, and it does not
seem likely that the idle funds in the
banks will be absorbed for some time
to come. There is therefore no i'm
mediate prospect for much higher
rates for money although the i'm
proved demand should have a ten
dency that way. Present conditions
and the trend of general business
lead to the conviction that a period
OF business expansion has commenced
which will last so long as the Euro,
pean beiligerent countries can find
the means of settling for our ex-
ports to them by shipping gold, re-
turning our securities or arranging
with us for deferred credits. The i'm
mediate business outlook is therefore
very good. What conditions NAV pre-
vail after the war or when the war
may end no one can forsee. The
former problem depends largely ON
the latter and both are at present
equally insoluble. We should foster
preparedness in more ways than one
and should not forget that latter a
PERIOD OF over-stimulation of COM
merce and trade fostered by a period
Of too easy credit the tide must in
evitably turn, and the greater was the
extreme to which low rates had gone
SO the greater must be the force of
me reaction upon the turn of the
lide. The expansion of business
and credit now under way must
sooner or later be followed by reac-
ton and contraction. When this
takes place the efficacy of the protec.
ton afforded under the Federal Re-
serve system will be tested and il ;s
my belief that it will not be found
wanting if the State banks doing a
commercial business will only look
ahead, rise to the occasion and as.
sumo their share of the responsibility
OF preparedness by joining the sys.
tenn now. What we need in this coun-
try is unified banking system which
can only be had by the cooperation
of State and National banks under
the Feneral Reserve Act. In union ,
there is strength.
GEORGE M. REYNOLDS. Pres;.
nent continental and Commercial
Bank, Chicago: While the great war
burst forth eighteen months ago, we
did not get our bearings: and began
To- comprehend the mighty changes
taking place in business and govern
mental affairs, until the early part of |
his year. The effect of the huge
sales of farm products and certain
iinds OF manufacturers had not then |
reached and affected other lines to
any great extent; but by midsummer
t became apparent that the revival
n trade was spreading. and now there
Ire but few industries that are not