The state herald., 1920-11-26
REACTION INEVITABLE SAYS !
NEW YORK BANKER, AND
NOTHING ALARMING TO BE
FOUND IN SITUATION

NOTHING ALARMING TO BE
FOUND IN SITUATION
The following article is taken from
The Nebraska State Journal
New York. Nov. 23-George e. Rob-
erts. vice-president OF the National
City bank Of New York. discussing the
business situation. says the country is
experiencing Q reaction from the OK.
cessive stimulus which characterised
the situation in the latter part Of last
year and down to last March. Prices
in some lines broke in March and the
weakness has been spreading ever
since. until they have given way in
practically all branches of production.
In the last two months the movement
has been. extending rapidly and the
decline has been more pronounced. es-
pecially In raw materials and food
products. The farmers think It a
hardship that their products should
suffer first. but It is natural that the
raw materials which enter In any per-
iod OF depression. Labor is the last
to fall. and the more labor there is In
a product. the more slowly the cost
OF production will be reduced. When
buying by consumers at retail falls on
purchases In Wholesale markets slow
up. goods accumulate. manufacturers
curtail operations and stop buying the
raw materials. and the latter deprived
Of . market begin to decline.
This new situation has developed SO
rapidly and taken so many people by
surprise that many have lost their
tempers. They think there must be
manipulation OF markets. conspiracy
somewhere. and much wild and
threatening talk is indulged In. II is
said In some quarters that the banks
are responsible. having brought 1t
about by contraction Of credit.
No contration Of Credit
The best answer to that charge is
by showing that there has been no
contraction of credit. There has been
a good deal OF talk about stopping the
in flatlon OF credit. which has been go.
ing on at an alarming rate. and about
the necessity for deflation, but banl,
loans were higher In October than at
any previous time.
o.. Ia,
open to criticism II Is for allowing the
volume OF indebtedness to increase as
II has since the armistice. A state
ment given out by the comptroller OF
the currency on October Is. shows the
increase which occurred between June
30. 1919. and June 30. 1890. and also
since June 80. 1917. The comptroller
authority does not extend to state
banks and trust companies. but once
n year he complies 4 consolidated
statement Of the condition Of all banks
including those doing business undei
state charters.
His statement given out on October
Is shows that on June 30. 1920. the TO
tai of loans and discounts OF nil na
tional ind state banks. trust compau
les. savings banks and reporting pri
vate banks was 30.ssi. .s9a 900. nm In
crease Of s5.s0s.73e.O00 over June 30
1919.
These nrc startling figures. and the,
do not show all Of the Increase. fol
while the rcdiscounts Of membe,
banks with the federal reserve bank
are included the opcn.markct pur
chascs and other holdings OF tho re
serve banks are not. The secrctar,
of the treasury. addressing the Ameri
can Bankers convention few day.
later. stated that the loans and dis
counts Of nil banks had increased
since tho armisticc IN the round sun
of seven billions OF dollars.
Increase Since the War
A. the total loans and discounts o
= these banks on Juno 30. 1917. 9Th,
date nearest to our entrance into IN,
war for which figures are obtainnbic'
was s20.sti .4s7.2bs. II appears thn
the increase. since the armisticc hal
bccn twice M much AZ while We wcr'
at war
Now can anyone give good reasoi
why ~ much more credit should b.
required To carry on business sine
the armiutice than during the war;
The physical volume Of business ha
not increased; production has not In
creased: the output Of coal has no