The Canon City record with which is consolidated the Canon City cannon., 1920-07-22
Crisis Over
in Business
Say Experts

W." 1OAAkA- Stiy L.ot = bCii-
Gus danger of business crisis did not
exist in the early spring of this year
is now admitted by the men of finance
who were familiar with conditions
They knew 1t at the time, but thought
that prudence required silence. Now
in these first days of the new fiscal
year perhaps the most gratifying re-
port to be made is one which tells
of the passing of the crisis and the
slow but steady relief from the en-
barrassment which business men met
with in the winter and early spring.
The crisis was a business embar-
rassment There was no real adm
ger of money panic. But business
men reported in the spring that they
were unable to forecast the future for
more than a few weeks They did
not know whether they would be able
to secure needed accommodations
from the banks. They feared lest
their loans would be called. The
farmers felt the pressure and were
obliged to cancel orders for tractors
and othsr farm implements. Many
OF the sales agents were compelled to
return the tractors which had been
placed with them for sale to the nam
ufacturers because the farmers could
not take these farming implements.
We now know that in the late fall
of last year the bankers of the United
States, at least the leading bankers.
were divided into two groups. No
longer does a division of this kind ex-
ist. One group which was perhaps
the largest and most influential, be-
gan in November of last year to insist
that rapid defiation should take place.
They asserted that continued imitation
OF the currency would not only main
tain but increase high prices. The
measures they advocated were to
great extent, adopted. Loans were
called. There was heavy marketing
of Liberty bonds with increasing de-
probation in the market quotations
for them. Defation was beginning to
hurt The supply of currency for the
business OF the country was far from
sufficient At the time when business
was calling for money the Federal re-
serve banks were carrying approx
mateIy $500, 100000 of government
through its plac1g in the Federal
treasury the money available for busi-
ness. embarrassment would not have
occurred
Throughout the winter and the
early spring the pressure for deflation
was maintained, although it was ap-
parent that there was not enough
currency available for the business
life of the United States because the
government. through its placing in
the Federal reserve banks of such
enormous sums of government paper
ahd abosrbei the currency
Ont he otherha nd a group OF bank
ers in whose membership were a num-
ber VIII had achieved a high reputa-
tion for nnancials agacity. insisted
that denation was too rapid and that
the attempt to bring it about was
made too soon. They went so far as
to refer to Great Britain. There the
reserve of the Bank of England was
a slow as Is per cent. Here the re-
serve was maintained at 40 per cent
Some of the banks Of the Federal re-
serve system were carrying reserves
in excess Of so per cent, notably the
Boston banks. The average reserve
was somewhere between AZ and 43 per
cent.
References were frequent to the re-
mark made in 1907 by the late j. p
Morgan, when he was calling upon the
banks for assistance in order that the