The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-23
OUR CREDIT FABRIC
DECLARED SOUND
A. B. Hepburn Believes Banks
Of United States Amply
Able to Care for Public.
MUST STEADY DEFLATION
Urges Shaking Off PessimiSm
and Realization of Re-
sources of Country.
MUST STEADY DEFLATION

The credit fabric of the country is
fundamentally sound and the COM
mercial banks and the Federal Reserve
banks are amply able to take care of
the public's needs. is the opinion of A.
Barton Hepburn. chairman OF the adj
visory board of the Chase National
Bank. expressed yesterday in his analy
sis OF the general credit situation.
what we now most need" Mr.. Hep
burn said in part, "is to recover from
the spirit of pessimism and realize the
great strength in the resources OF our
country. 1t has been the aim. may
say the struggle of the business and
banking interests to steady the defla-
ton. the inevitable reaction from the
wild initiation we have experienced and
enable business TO reach Il lower and
safer level without disaster. People are
gregarious. sentiment is contagious and
fear. seems to pervade the entire com
nunity now. just as extreme optimism
did a year ago. There Is danger that
curtailment of business may be carried
to an extreme, as unwise expansion was
in the months following the armlstice.
I'VE have more than 100.000O00 peo-
pie who must be fed, clothed, housed
and who have other Imperative needs.
Manufacturers should continue to make
goods from raw material at the reduced
cost in volume sufficient to meet the
public requirements. Wholesalers should
buy these goods and pass them on to
the retailers as the public surely will
require them IN large volume or
course sales abroad may be largely cur.
tailed by inability of Europe to pay for
our manufactured goods, owing to their
distressed condition and owing TO the de-
prec.ation of their currency, and in con-
sequence of the high prices they are
compelled to pay for exchange.
Food products they must have and
raw materials, but manufactured goods
they must get from their own rehabili-
tated factories. 1t is for their interest
and it is for our interest that they
should restore their manufacturing
power and our manufacturers should
curtail output to meet this situation,
but they should keep their plants active
and produce enough TO meet local de-
mands which. in view Of our vast pop
ulation, should be very large.
1.-THE credit fabric of the country
believe to be fundamentally sound. The
commercial banks and the Reserve
Bank are quite able to care for the pub
lie needs. This has been amply proven
in the past two years. We may nave
a year or more of slow business. in
which the shadow of the war and Its
inevitable readjustments viii cloud the
horizon, but eventual prosperity is sure.
and It is the part of wisdom to keep
oneself and ones business in position to
enjoy such prosperity
'"The wholesale welshing OF contracts
to purchase goods is mainly responsible
for the embarrassments In the CONNER
cial business to-day. This practice
should be avoided in the future 1t Is
by no means honorable, 1t begets con-
fusion, entails heavy losses upon the
community and depreciates us in the
eyes of people abroad. A large
business going at full speed cannot be
arrested instantly without making
trouble. The ruthless cancellation of
contracts is responsible largely for the
embarrassments in the present situa-
ton.
There may be trouble in spots. but |
nothing. I believe, that cannot be sue |
cessfully overcome. l believe the banks
Of the country are prepared to and fully |
able to protect our credit fabric. Let !
US preside with manly confidence"