Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-05-18
FORMER IowANs HIGH IN BANK
ING CIRCLES EXPRESS
CONFIDENCE.
RESERVE SYSTEM
PREcLUDEs UPSET
Arthur Reynolds Warns Businsss
Men 70 prsssrvs Caution and Not
Attempt 70 Attain Maximum Pos
sibls With Unlimited Credit =
Gssres z. Rsbsrtss' Opinion.

Special to Times Republican.
De Moines, May ls.--Thers will
be no business panic. This Is the
view Of Arthur Reynolds. OF Chicago,
first vice-president and director Of
the Continental and Commercial Ma
tional Bank. of. Chicago. It Is alss
the view Of George D. Roberts. Of
the National City Bank Of New York.
as expressed in recent article.
Similar observations have been made
the past few days by other financial
observers.
Arthur Reynolds. who has been
visiting In Des ,Moines the past two
days, says the federal reserve system
Is big factor in helping out during
the present stringency.
Il have no fear OF a panic" declar-
ed Reynolds, in a statement given
out here. THE federal reserve sys-
TEN has prevented financial disaster.
but every business concern in Am
erica must exercise caution and must
not attempt to attain the maximum
amount OF business which it would
realize with unlimited credit.
"On account of higher prices and
higher standards of living il re-
quires three times as much money
to do business as, it did before the
war. 1t also requires three times as
long to set credit around.
function in normal way is largely
responsible for the tying up of credit.
The enormous demand for money is
unparalleled in the history Of the
country.
There is a fixed pile Of gold in this
country and on this the pyramid of
credit is built. II, is impossible to in
crease the pile of gold and conse-
Quently the only other. alternative
il to restrict business"
Condition Not Panicky, says Roberts
George Roberts says that '.the
public appreciates that something is
wrong and that things can not go
on this way indefinitely. and as such
conditions have always terminated in
panics In the past there IL frequent
suggestion OF panic.
The condition, however, are not
the same now a. when panics have
occurred in the past" he declares.
For one thing, tho banking organi-
cation IL radically different When
the word panic 10 used. people gem
orally mean q run on the banks by
depositors. In the past anything like
q general situation of this kind forced
. suspension OF cash payments and
once q panic was started It spread
quickly over the country.
"The federal reserve system was
planned to prevent such occurrences.
1t has the power to do so. All reserve
requirements may be suspended in
such q situation and the reserve
hanks can supply currency to the
full amount Of the Z, assets OF the
banks. and when yottconsider that
government bonds are good collater-
al for loans At the reserve banks and
realize the amount Of this collateral
that = available in any community
sou will see that there 10 no likeli-
hood Of = scarcity Of currency"
8. 3. Fontaine, q financial writer
Of New York. declares there IL not
tho slightest foundation for all this
panic talk that u being persisted In.
despite tho reassurins statements
which have been put out by the
bankers a. q palliative for unstrung
nerves but We might az well make
up our minds to face the fact that
the peak Of this artificial prosperity
the country has been passing thru
has been reached"