Forest City press. (Forest City, Potter County, D.T. [S.D.]) 1883-19??, 1917-02-09


II Is obvious to everyone that some In
dustrial and financial REIMBURSEMENT in the
United States must come with the close
of the European war. The Industries fur
fishlng war supplies will necessarily go
upon a different basis, and their securi-
ties will he affected. What Is in doubt Is
the range and extent OF the disturbance
and OF the inevitable readjustment. My
own impression is that the change will not
IN Itself seriously affect the general trend
OF business and financial operations.
There viii he a SPECTATORS collapse-per-
maps the sort OF thing which is sometimes
described as a rich mans panic. But those
In actual charge of the war industries and
those who have financed them mot by any
means all those who have specialized in
'hefD, necessarily had ii In mind that the
END or the war must come, and have made
theil plans accordingly. In any case.
considerab bic as is the bulk of this war
business. ii forms by no means so large a
FACTOR IN the operations Of the entire coun-
Try AS its conspicuous position leads peo-
pie To suppose.
AS regards general business, we have
10 hear in mind the repeated experience
una periods OF upswing and periods OF
depression both have a cumulative char
acter. once started. they tend to keep
gong. Depression outlasts the causes of
depression; prosperity outlasts the causes
OF prosperity. OF course. this general ten
uency is affected by the special condi-
lions OF each cycle.
Federal Reserve Bank Observations.
obviously our new banking system. and
the great powers and possibilities of the
federal reserve board. introduce a factor
which was not present In former periods
OF the same sort. That system was de-
signed, more than for any other purpose,
10 prevent acute financial panics OF the
sort which We experienced In 1873. in 1898
ana In 1907. For myself. I have faith that
thls object will be attained. The new
banking system will not indeed prevent
Industrial, overturns: periods of depression
VIII follow periods of activity. But the
extreme and disastrous financial panic we
may hope 10 avoid.
III Is even possible that the efforts which
the federal reserve board is now most
wisely making to put a damper on excess
of speculation will nave an effect In main
tanning industry finance, and commerce on
4 more conservative and even course. But
1t is not superfiuous to sound q note of
warning against unlimited confidence in
the strength OF the new system. After
ali, 1t Is still on trial. Let IL be remem-
bered that the Bank of England act of
1871 Chat under which the bank still oper-
atcs), was expressly designed to prevent
panics, and that nevertheless one of the
worst Of England's panics took place a
few years after its enactment. Eventually.
that famous measure did indeed accom-
plish the result expected, yet In a way
quite different from that planned and pro.
vided. ! DO not say that we are likely to
nave similar experiences with the federal
reserve system; indeed, there are no pres
ent Indications looking that way. But the
possibility Of an untoward and unexpected
outcome must not he denied or overlooked:
= panic is not absolutely ruled out from
the ~eNentualities of the future.
As regards international relations, we
face a prospect equally uncertain, per-
maps even more uncertain. The imme-
date and permanent effects of wars have
long engaged the attention of economists,
and some things about them are we'll
enough understood. But this contest la
on SO huge n scale that past experience
Is of very limited service. How great is
already the industrial mud financial strain
IN the warning countries, how near will
be the approach to exhaustion before the
war ends, nobody now can see. The prox-
innate effects of the war on international
trade and finance have been obvious; It's
ultimate effects are difficult to foretell.
Possible Collapse.
Assuming that the stage Of complete
exhaustion is not cache in the leading
countries, there are plausible reasons for
expecting that Immediately after the con-
ciusion OF peace there will be a period of
at least pparent revival and activity.
The situation will be analogous to that Of
4 city recovering after a great fire. The
Hrst thing. to do Is to set things in order.
and, above all, to make good the damage
to plant, machinery, buildings. Through
out Europe the greater part Of the ordi-
nary Industrial outfit has necessarily been
neglected during the war. Repairs and
replacement have been reduced to the
very minimum: no new plant has been
created. With peace there will he a de-