Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-01-02
10l0cEDIEc. -.
RESERVE BANK
IS A: GREAT
STABLlzER
Big Duties Seen Ahead For
1919, According to
John Rich.

Jonn Klch.
Minneapolis. Jan. 2.-One Of the
great stabilizinK factors in the United
states during h stress Of war was
the Federal Reserve bank system,
And 1t gives promise Of being equally
ef1cient in the period Of reconstruc.
tion that now eonfronts us and will
be more in evidence when the terma
OF world peace finally are promulgat-
ed by the Paris conference.
1t is interesting. therefore, to re-
view what the Ninth District Federal
Reserve bank contributed to war
time activities. together with the part
IT will play as an aid to the readjust.
ment of business.
Problems Still Great. I
1.-THE prospect of an early proclaim.
alton of peace will not. after all, mini
mize the importance of the problems
that the Federal Reserve system and
the Federal Reserve bank Of this dis
trict will meet during 1919" says John
H. Rich, reserve agent.
II think it IS very possible that the
problems of readiustment will be
quite as serious and quite az impor-
tant in their bearing on general BUSH
ness as were the problems created
while we were actually at war. We
are extremely fortunate in this dis
trict in that there is much less prob-
ability of severe readjustment follow
ing eac than in districts that are
more given w to manufacturing or
to the production of commodities
other than the stable food products
for which there is always q market.
Some readiustment is to be expected.
C1oa1 ohsfti~p - 1oho~rrSI1 ~~@..r ~-l
it Is going to be of the utmost i'm
p%ortance during 1919 that employers
Of labor face their peculiar problems
in a spirit of perfect fairness. with
a feeling of comradeship toward their
men, and with a determination to
deal with them on a basis of exact
justice.
Labor will have to contend with
very high living costs and with the
inevitable decline, to some extent at
least, in the wage rate Mr.. Rich
my opinion, that wage rates be not
permitted to decline sharply or to
seek lower levels except as the move
ment goes hand in hand with the de-
cline of commodity prices, which
likewise must come.
Upon the other hand, labor will
serve itself best. and the country as a
whole. if it will remember that the
problems of the employer during the
readjustment period will. be peculiar
~ difficult, and if it will deal toward
the employer in the same spirit Of
fairness and justice.
Districts Position Strong.
1.-THE financial position of the dis
trict is surprisingly strong. 1t has
been able to subscribe to the success
sive war. loans 1926. 900, 900 and to
take in certificates of indebtedness. an
additional sum. raising the total we'll
over the S70O, 100000 mark. Yet bank
deposits are larger than before. and
the district is everywhere prosperous.
The buying power of the people has
not been impaired, and that status
Of the average, mar is not unfavorable
as compared with the outbreak Of the
war. This is a most remarkable re-
suit, due, ] think, in large part to
the very satisfactory prices for all
farm products. live stock and wool.
With a guaranteed price for wheat,
and the probability that the price on
all. other products of farm and ranch
will remain at very satisfactory levels
during 1919. at least. there is no fea-
son TO expect that the e will not
he prosperous and business will not
be good.
ave are not yet through with gov
eminent financing. At least one more
Liberty loan is coming. The readjust-
ment period will bring a>demand upon
the blanks. which i'm all probability
win not be less severe than we exper.
fenced during the past IS months
Such a demand will require the ut
most nicely Of Judgment on the part
Of the banking world in order that
it may meet it without stress or shock
The Federal Reserve system has prov
en- its value duEing the past 1S months
and in meeting the problems of the
next year or two will continue to be
of the utmost service.
Active Year Expected.
IT do not anticipate that the FEEDER,
al Reserve bank will be less active
in 1919 thar during the year which
is now closing. ! anticipate that the
discounts for member banks will con
tinue at somewhere near the 1918
level, and that there will he. an &C.
tive call for its facilities and support
To what degree the Federal Reserve
bank has supported the situation IL
this district during the past IL months
may be judged from the fact that a
the of the load in October it.
discounts ran to, s9S. 600. 900. Thi.
represented a volume OF credit which
would otherwise have been unavail
able.
This. and even a larger volume
Of credit. can be extended in 1919
if necessary, due to the very satisfac,
tory increase in gold holdings. The
combined holdings Of the federal re
serve agent and the bank at the clos.
of 1915 were $ss, 1923, 900; at the clos,
Of 1917 the figure had risen to $40.
$4,000. and at this date the combined
gold holdings, are $96.346.OOO show
ing an increase>during the year of ap
proximately $26, O00, 900. This increas,
may be taken as a reliable Their
mometer, showing the increased pro
tective value Of the institution, ant
holdings a be translated. il neces
sary, into terms Of additional accom-
mediation to its member banks.
II cannot foresee or imagine /.
condition during 1919 that will pu
the institution to any undue strain
falthough the call upon it will b
heavy.
Horse Sense Demanded.
IF anything is demanded at thi
juncture 1t is cool level headednes
and horse sense. Business is goinI
to go on Is usual in this district; an
the farmers are going to be prosper
GUS. At the same time it would b
very poor judgment for those in tn
Ninth district to believe that, howev
err fortunate they may be in location
in the character Of their business 0
in the Importance of the agriculture
interests, that they can wholly escap
the changes that are SIRE to com
> and the reaction that will follow tn
declaration of peace.
we cannot go back in every re
I spect II conditions before the wal
In business and professional life. 1
the ranks of labor and everywher
} through the land mems opinions hav
changed and their views have under
gone notifications. All business will