Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1920-09-26
of
Financial
Panic cOver
Transition Of Business Condi-
tions to More Normal Basis
Proceeding Quietly, Gov. =
ernor Harding Says.
Open Market Needed
By ARTHUR SEARS HENNING.
Chicago Tribune -Omahn Bee Leased Wire.

Chicago Tribune Omaha Bee Leased Wire.
Washington, Sept. 25.-Although
business conditions are still far from
EoSmai, and the processes of effect
ing an orderly and gradual deflatinn
i'll the months to come will call for
a high order of craftsmanship, the
danger of any disturbance akin to
panic has now passed.
This is the opinion of Governor
Harding of the federal reserve
board, with whom | discussed the
financial and commercial situation
today.
The federal reserve system is
still confronted with conditions
more or less abnormal, but we have
passed through the period of exhil-
iration or intoxication which char
acterized American business activi-
ties several months ago, and. not
withstanding the gloomy predictions
which were frequently made at that
time, the transition to more nor
NAL basis is proceeding quietly and
without alarming features" sad
Governor Harding. sd
"Credit, which is required for
seasonal needs, is being, granted, and
business generally is looking for
ward to a fall and winter of at least
average activity. Sentiment is being
helped by the bountiful harvests, by
the better outlook for the railroads,
and by the knowledge that many
highly essential developments which
have been long deferred by force
of circumstances, such as enlarge
ment of our transportation facilieies
and additions to housing accommo-
dations throughout the country,
must soon be undertaken.
Broad Demand Developing.
"a broad demand, which will
probably extend over a period OF
years, is openingup for the products
of our basic Industries, and if IN
the readjustments ahead of US, any
lines of business should prove to be
overdone, there is every assurance
that any surplus of brains and
energy now engaged in such lines
can be readily utilized in other fields
of activity
Governor Harding said that the
crisis of last spring, due to much
much greater expansion of credit
than during the war, was success
fully weathered as a result OF the
actions of the banks, under the
guidance of the reserve boars, ~
curtailing loans for nonessentials
and thereby diverting capital to the
production of essentials,
II am a firm believer" said Mr..
Harding, "in. gradual and orderly
methods of marketing our great ag-
ricultural surplus. Agriculture is the
most important of all industries. for
upon its fruits depend the lives OF
those engaged in all other indus
tries. The farmer is great con-
sumner Of manufactured products
and~anything that affects his buying
power is soon reflected in business
of the merchant and the manufac.
turer.
"While the individual farmer may
be just as well off with small pro,
duction and high prices, the mass oy
the population is far better off with
full production and moderate prices.
Surplus necessary.
"Great staple crops, the produce
ton of which extends over period
of several months, must meet the
requirements of consumption for a
full year, and, in order to prevent
possibility of shortage, it is desirable
that there be reasonable surplus
held over from one crop, pending
the marketing of the next. The
gradual and orderly marketing OF
our great staple crop is, therefore,
a matter OF importance both to pro-
ducers and consumers. The dump
ing upon the market within a short
period of time of large part of
crop, consumption of which extends
throughout the year. means not only
a loss to the producers, often to
those who can least afford it, but in
wolves also great strain upon our
transportation facilities and upon the
banks, in providing funds necessary
for large purchases in advance of
actual requirements for consump-
ton.
1T is clear the volume of our
great staple crops is so large and
the value so enormous that any effort
to valorize them by means of bank
credits would inevitably result in
disaster by the operation of econom-
ic law. +
"But I think that all reasonable
assistance should be given pro-
oucers to enable them to market
their crops in an orderly way, pro-
yided they are willing to sell enough
to meet current requirements, and
that consumers should concede to-
the farmer reasonable profits in or
der that future production may be
adequate.
What is needed is an open mar.
ket in which the law Of supply and
demand Is given free play and in
which buyer and seller may meet on
fpua1