The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-11-20
1lEr THERE BE CAUTION.


During the whole period of indus
trial and genefal financial depression
between 1907 and 1914 we made pvac-
tically mo extension of railroads We
did but little building of dwellings or
business houses as compared with our
growing population, and from 1914
to the end of the war the nations ac-
tivity was conferred entirely upon war
work. In that period railroad ex-
pansion was practically dead. We
were wearing out the rolling stock and
the road bed, and for years to come.
unless business interests are to be
halted, we must spend vast sums, rum
ming far into the billions, for the bet
terment of all railroads, the increase
of rolling stock and the expansion of
railroad tracks Thus, in it's broadest
sense, we may say that the entire
country had for 13 years been with
out normal poise or the normal con-
ditions on which could be based
broad, progressive construction work.
We apparently were facing a long
period of Industrial and agricultural
stagnation when the European war
changed the whole world. Within a
few months after the opening battle
the allies began enormous purchases
of foodstuffs and munitions. They
poured out their accumulated wealth
OF the ages in buying from US at
facturers, but this prosperity was CEN
tered mainly in certain branches of
iron and steel, munition making and
kindred interests. 1t created a fever
ish prosperity, with business men al
ways having before them some uncer-
tainty as to how long it would last.
When we entered the war this ma
ton Immediately began a period OF
still more feverish activity in pouring
out billions for the construction of
munition plants, the building of ships
and the production of war supplies OF
all kinds. Great was the momentum
created in almost every avenue of
business life. Higher wages than we
had ever known brought about a
scramble for the purchase of luxuries.
This widespread activity and the in
flation CONNECTED with the placing of
our bonds. stimulated by European
demand, forced almost unprecedented
prices for all farm products.
Twelve months ago there was
Astounding prosperity thruout the land,
farmers getting high prices, laborers
high wages, manufacturers earning
large profits, and out of all of this
cess-profit taxes to aid the federal
treasury. Now it is being charged in
some quarters that the Federal Re-
serve banks thru a systematic curtail-
ment OF credits have killed this pros
perity and an early attempt to amend
the federal reserve law may be ex-
pected.
This law has functioned SO admir-
ably during the war and since that
efforts to change it should be under
taken with great caution. The rate
at which the country was travelling a
year ago if it had been maintained
would certainly have resulted in a
financial crash, unless past history is
misleading.
w ME ldllAlS prizes anu ing lStLiHS
down of industry resulting from the
curtailment of credit by the banks
may work many hardships and finan-
cial losses it may be that these results
are preferable to a sudden and violent
collapse of values such as the coun-
| try has experienced in the past. One
of the purposes of the federal reserve
law was to prevent panics and it
probably has done that very thing.