Every evening, Wilmington daily commercial., 1920-05-19
COUNTRY IN PERIL
FROM INITIATION,
HARDING WARNS
Immediate Dehation Imperative,
Says Member of the Reserve
Board.
CONDITIONS ARE ACUTE,
HE TELLS CONFERENC CE

"
Board, that the nation could not continue
along path of declining production,
increased wages, increased prices and
expansion of credit without bringing on
"A real crisis, representatives OF every
Federal Reserve Bank in the country are
preparing TO return to their homes ana
to preach and insist upon, and If necessary
10 enforce. n process of orderly detiatIon.
The rather extraordinary conference
of the leading financiers held yesterday
with Governor Harding was called 10
consider the acute although not entirely
alarming credit condition throughout the
country. That a peak has been reached
from which orderly deilatiOn must pro-
coed either through voluntary acceptance
or the enforced curtaiment Of credits,
the ending of boarding and speculation
and the resultant movement of necessary
productions to their markets is not denied,
hut Governor Harding said with the
resources Of momber and non-mcmber
banks sufficient credit would be had for
all essential and some non-cSSentlai
production providing the credit was
released.
The conference took only one decis We
step by adopting a resolution commend
ing the policies advocated BY Governor
Harding but it was Indicated committee
confer with the Shipping Board and the
Interstate Commerce Commission to
point ont how credit was frozen through
goods being held in transit and while
demand existed for them. Another COM
mIttec Is preparing a resolution which
II Is understood Will call on banks through
out the country To investigate and deter
mine to what extent boarding and specua-
non has been responsible for the credit
situation and to apply remedies where
possible.
HARDING Is COMMENDED.
The resolution after commencing the
policies advocated by Governor Harding,
enforced eurtailment Of credit. increased
production. increased saving and lesscncd
consumption was 4 follows
That the bankers assembled believe
that the widest publicity should be gwen
Governor Harding : address. and further
that they hereby agree to abide bv the
spirit Of the address in the conduct Of their
own affairs and that they will encourage
its general adoption by the bankers and
the people OF our country.
Tie conference practically completed
lis business TO-DAY The remaining work
will be accomplished by the special com
mittee That the conference viii have the
most tar-freachlng consequences and hat
he policies advocated viii bc successful
m solving the credit situation was the
opinion expressed as the conferees de-
parted.
The committee which viii confer with
the transportation boards follows Charles
II. Rieman. of Baltimore: +. n Decker,
# Minneapolis: ". J Bailey. Of kansas.
harles H. McNeldcr. Of Iowa. John
Perrin. OF san Francisco, and X. L. Ball
ol San Antonio.
As HARDING SEES II.
Summed up. the story told by Governor
Harding follows:
Expansion during the war was not
alarming, but bank loans were increased
approximately 25 per cent from April
1. 1919, to April l, 1920, as compared
with an average increase Of 10l2 per
cent during the war.
Production IN 10 important lines
live stock. grain. lumber, coal petroleum
pig iron. steel Ingots. copper and wool
has fallen off at least 10 per cent
Production figures during the first
Quarter of this wear were showing improve
ment when the difficulties in the trans
portation field loomed up and il Was as
-lred some resultant trouble would be
had for both production and shipments.
REMEDIEs SUGGESTED.
The remedies prescribed and which
must be accepted through cooperation
az the public and member banks or I'M
doubtedly which will be imposed through
resultant conditions were set forth by
the conference as follows
Personal sacrifices for the general good,
or return OF the war spirit Of producing
more. saving more and consuming les.
Reliance Of bankers upon their own
resources rather than upon the resources
Of the Federal Reserve banks.
Unnecessary and habltual borrowings
must be discouraged and liquidation of
Ion ong-standng non-essentlal loans should
proceed. speculation should end and goods
should be permitted to flow 70 their
markets.
Drastic steps must ne avoided orderly
methods mnst be adopted and through
gradual liquidation permanent lmpIoy-
lnent will result whereas by reason 0f
too rapid defatlon serious injuries might
be had.
PRODUCTION DECLINING.
at is the tendency Of production to
decline, particularly IN some essential
lines which constitutes d very unsatIs-
factory element IN the present outlook
said Governor Harding 1t Is evident
that the country cannot continue ~
advance prices and wages, to clIrtail
production, 70 expand credit and to
attempt TO enrich itself by nou-productive
operations and transactions without fos-
tering discomfort and radicalisn, and
that such a course, If persisted in, will
eventually bring on a real crisis.
The fact must be recognized that how
ever desirable the continued expansion
Of trade and industry may be, such devel-
opments must accommodate themselves
10 the actual supply Of capital and credit
available, Mr.. Harding warned. Show
ing the condition the world over he said
the official bank rates are now higher
than at any time in the present century,
except during the war panic week al the
beginning Of August, 1914
TWO METHODS SUGGESTED.
There are only two methods Of curing
this condition, Governor Harding de-
clared. One is the contraction Of credit
and the other and by far the more desir-
able way, increased production. Where
it is not desirable or where IT IS lmpos-
sible to increase essential production the
necessity then is TO check consumption
and through moderation IN the use oi
credit, check the tendency towards d
further widening Of the margin between
goods and credit, he advised.
fOur problem, therefore, Is TO check
further expansion and to bring about a
normal and healthy liouidati0n without