The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-02

Y
hhancc, II hy5 seen thc financing Of
| ne greatest war loans ever tioatod by
any government the largest popular
contributions ever made to charity: and
"uch immense increases in the nations
faNioll requirements and charges for
+, freight and passenger service as to add
enormously to tho cost OF living and
conducting business. All these develop
meDts have related directly TO the work
or making American participation in the
"ol1d war MS effective as possible. In
the light Of what has happened, Il is
| "ident that the war was not only d,
huge industrial undertaking. but an i'm
portant financial enterprise in the sense
| 'hat u called for the most perfect or
sanitation OF the country's banking re-
, source4
Dawn II. Forgan Of Chicago. one of
me highest authorities on centralized
banking, said the other DAY tina IF we
! had not had the Federal Reserve s,s
tenn we could not have financed the
war. Mr.. Forgan added that we would
/ nave been the laughing stock OF the
! world That this is literally true one
! mas only to recall the potable leadership
OF the Federal Reserve Board in helpiny
! me Government finance its requirements
m protecting the American gold supply.
' III nrakirg II easy for the banks to make
! large advances to subscribers for the
two record breaking Liberty loan issues.
IN developing the facilities OF the &C.
! ceptance system, in creating a huge
! cfedlt fund for resort to by those con-
! cerned in stimulating American trade
LIN foreign fields and in the expsnsjon
lof what has come to be a remarkable
system OF rediscounts between the mem
Der nanks and the twelve Federal Re-
| serve institutions The extraordinary
achievements Of the year under our CEN
! tralizcd service justifies the tribute maid
! the Federal Reserve system by SIR Ed-
! ward TT. Holden, The foremos, London
! pank chairman. who declared that the
American system ''surpasses IN strength
ana III excellence any other banking
=! stem in the world"
| ferhaps the most signal service rem
dered the community by the Federal Re.
serve Board was the campaign iraugu-
| Idttc a year ago to conserve credits and
20 get the people to release goods and
services for the Government. In pub-
| NC statement year ago TO-DAY the
, hSar' startled the people by this frank
! statement:
..c' the people realize that il is more
! lNSnatahe, In such war times as con-
! 'front.' Us, 10 be seen In old clothes than
, IN new cnes, Let the banks tell the peo-
1
l thofities, the Mayors and Governors,
mat this Is not the time for cities 10
ne spending money on public works
rather should they be considering the
suspension OF existing work with the
I View or releasing men and material FOR
TIE use OF the Government and so az
not 10 compete with the Government for
, tha savings Of the people, thereby weak
ea'ng Tie ability of the Government TO
! place Us loans"
/ This marked the beginning Of what
| proved to he the most extraordinary
! movement 10 cur,aii credits that this
! H7''"n has ever seen. II brought home
; 20 ilo.no0.0cO free spending Americans
! ne truth that the nation was in danger
! or losing the war II i pursued the fool
J 'sh policy of business az usual" This
1 action was followed Oh February 6 by
! Secretary McAdoos request that all OF
/ The 5000 banks OF the country set as.d.
every week i certain proportion OF their
I resources FOR Investment In Treasury
. Ger ri ates OF indebtedness This made
stiy bank directorate in the country
| devote portion Of every weekly con-
! ference TO discussion OF the war needs
I ana the necessity of putting the Gov
comment demand ahead OF everything
! else From that moment the Govern
| N'eit became the preferred borrower at
! all banks. and the newspaper headlines
! emphasized the fact that financing the
! war was largely question of conserving
! the economic, as well as the financial
! strength Of the nation. With the spirited
| discussion Of the emergency calling for
| the formation of the War Finance Cor
roration.' made possible bi the act OF
/ April :. the luxury margin III every day
! wing begaA to decline and the people
| were prepared TO practice the thrift and
| economy which the President called for
. in his public appeal OF May %
Then followed on July Tue note
t worthy appeal by Governor Harding Of
, the Federal Reserve Board and dts
: tiinutcd through the Federal Reserve
! Banks to every national bank state
bank and trust company in the Coun-
try. declaring thai AN unnecessary use
[ OF credit, needless recourse TO the dis
| ,our.ting facilities Of the Federal re-
! serve banks, wcakens proportionately
/ The cold reserve ~ the United states,
! thc financial backbone or the entire al
; led group. This letter stirred the
whole country being widely quoted and
causing general discussion OF the best
means of enlarginS our production OF
, the materials necessary FOR the success
J OF the war enterprise. The movement
was coinc!dent with the effort to or
| ganize Tar savings associations. and
! largely as a consequence of the steps
taken by the Federal Reserve Board the
| American people introduced important
economics
| Reviewing this movement in the light
of what has happened since the signing
of the armistice on November II. It is
evident that the persistent efforts TO
/ make the people curtau expenditures
and the measures undertaken to have
| the hanks restrict credit aco,mmoda-
| tons to the non essential industries were
Of the greatest service in protecting the
! courtrys bank position from the evils
, growing out OF an abuse of credit The
! curtaIlmeDt was objected 10 by SJme
as were the efforts of the Money Pool
, Committee in this city to restrict the
: loans made to borrowers upon stock
! Exchange collateral. It is easy 10 see
that both measures We're necessary II
the banks Were 20 continue to finance
me unprecedented needs of the GOV
| crnment. If it was true that the co,n-
/, Try having the largest supply of goods
and gold available at the end Of the