The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1920-02-07
CHECK LOOKED
FOR BY ECONOMISTS

The Harvard committee on eco
nomic research, appointed by Harvard
University to make special studies Of
economic conditions. has just IN
nounced that the United States may
expect a check in the upward move
ment of prices and of business activ-
tty. which has been In progress since
last April. says the Christian Science
Monitor.
There also may be a drop in prices.
At the present time, however, the
committee states. and on q basis Of
the November and December figures,
it would be premature to conclude
that a violent recession in commodity
prices is probable.
The committee vas appointed by
Harvard University in 1917 to assist
in the solution Of the fundamental
economic problems which underlie
modern commerce and finance. 1t
provides statistical information to fed
eral reserve banks, for banking houses
and large corporations and includes
among its publications a review Of
view of economic statistics which con
tains a price ~forecaster.
The committee bases its present
forecast upon statistical material rep
resenting the decline in the New York
bank clearings. the volume Of sales on
the New York stock exchange, the
analysis OF the banking and trade
situation, domestic and foreign.
Professor Warren NJ. Persons. edi-
tor of the statistical service published
by the committee, a y that the sta
tistics collected by the committee in
dictate that the farmers will continue
to prosper in 1920 and that the pros
perity of this industry will contribute
to that of all others during the COM
ing year.
The beginning of the new year, he
declares, finds American manufacture
ing industries in a sound and pros
porous condition.
THE tightness of the money market
and the announced policy, already in
augurated, of the federal reserve
board of increasing discount rates
have caused many observers to have
grave misgivings for the financial out
look of 1920" he says. Instead of
causing alarm, the action of the fed
eral reserve board should, in fact, be
regarded as a favorable omen. High
interest rates are the main reliance
for protecting bank reserves and they
spell not disaster but safety, provided
they are applied in time. Control of
interest rates is the safe and effect
i've way of dealing with such a situa-
ton as we now face, and it is to be
hoped that n~othing-not even the
needs Of the United States Treasury
will divert the reserve board from
pursuing the only sane and conserva-
tive course.
1.-The outlook for 1920 is for a con-
tinuance of a large demand for credit
that will not be supplied. except at in
creasing rates. High rates for bank
loans will eventually tend to check
the upward movement of commodity
prices as they have already checked
the upward trend of security prices
and the volume of speculation on the
New York stock exchange"
Concerning the opinion Of some
business men that the whole economic
situation now is abnormal, the COM
mittee says: Abnormal it certainly
is in many respects. Prices are very
high; there has been great expansion
of bank credit: ex~travagant expendi-
ture. both public and private, is found
on every hand; and our abnormally
large export trade is likely to suffer
curtailment. A year ago many OBJ
servers expected a violent drop in
prices and a crisis in 1919. Today
there seems to be less reason for ex-
pecting such developments in 1920"
The Harvard committee ON eco
nomic research is planning to publish
this year monographs embodying spe-
cial studies of the principal economic
conditions and forces that will affect
prices and trade throughout the world
during the next five years. The COM
pafffno also will cx,lx, n-l .I,.usH, a.
annual statistics of industrial COM
merce and finance, and will construct
trade indices based upon them. The
committee is composed of university
professors and men of affairs with
Charles ]. Bullock, professor of eco
nomics at Harvard, as its chairman.
Eureka-Local man reports $780,
a