The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-02-14
TO CONSERVE CREDIT RESOURCES.


Despite the feeling in eastern centers that the de-
preston in the New York Stock Market constitutes
unhealthy spot in American business, the Federal
Reserve Board entertans such belief and is con-
WINGED that the broad foundations of business activ-
ity throughout the country are not to be adverse
ly affected 10y the Exchange crisis.
1t is recognized that in normal pre-vvar times and
especially before November i6. 1914, when the Fed
eral Reserve Banks first opened for business and
Paul Warburg declared the occasion to mark the ma
tons emancipation from financial panics, such a
stock market furry has just occurred would very
seriously have injured and depressed business
throughout the country. But today the Federal Re-
serve Board knows and influential agencies of pri-
vate business have come to feel that the New York
money market has lost is power to make national
economic trouble out of superficial causes.
At the meeting of statesmen and editors held in
Atlanta during the Victory Loan campaign, the then
secretary of tn etreasury, Carter Glass made the
statement that just so long as the Federal reserve
system maintained in the United States. there
would be no financial panic in this country.
Mr. Glass, President Wilson and others engaged in
working out the details of the federal reserve plan
met with much opposition from the money kings of
Wall Street But they persisted in these plans with
the result that not only the United States
red safely through the greatest war in history and
memorable as the most expensive in all history.
BIT the period the most prosperous for all
classes in the history of the nation
financial panic in the United States during the
war would have meant world panic; stability here,
practically meant financing the nations of the EARTH
We came through the with flying colors Now
we need to have care as to how we change or
tamper with system which has proven itself SO
adequately.
The crux of the situation is this A crisi sand a
period of depression in the New York stock market
spring from superficial and speculative causes and
superficial and speculative interests alone are in
jured thereby; the need for the production of com
modties throughout the world is so pressing that
the bulk of the country which is engaged in pro-
ducing these goods will not find the demand dimin
shed or the situation altered at all by the embar-
easements of the stock market. The existence Of
the Federal Reserve System makes it impossible for
the money market furry to currency strin-
gency or an absolute stoppage of funds for egiti-
mate purposes Hence. the essential business of the
country viii march past the Stock Exchange heed
less of its crises knowing full well that such super
fetal phenomena shortage in call money and the
difficulties which spectators may find in financing
their ephemeral enterprises, which add nothing to
the sommon wealth. work no fundamental
change on the soundness of the national business
situation. The need in the United States and
produce goods will find them taken off his hands at
good prices. Such need not be alarmed at stock
market antics so long as he keeps busy.
Responsible banks which have made close analy-
sis of the situation are not alarmed They are nre
pared to stand by the Federal Reserve Board in its
fiSht on the SPECTATORS. realizing that the only
pathway to business soundness of an enduring
nature is the one the board points An interesting
expression of bank opinion in this connection is fur
nished in the statement presented below:
Continued frmness in money rates is expected he
cause OF the large and increasing demands for funds
on the hand and the necessity of strengthenin%
the banking position by conservation of credit on The
other. The extension of banking facilities has an
preached point where it is necessary to restrict
Their accommodations to SCUM dand essential produc
tive undertakings The volume of credits needed b,
such undertakings will hardly decline substantially
in the near future Industrial and commercial activ-
ty on the prevailing level OF prices, continues un-