The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1920-12-10

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Tile credits. while cautiously curtnilcd
in many eases, continue to be OF a
fairy satisfactory nature. The most
aggTaVating slowness in collections Is
found in the agricultural sections,
particularly In the south. That. Of
course, IL a natural consequence of
the h%esitancy OF farmers TO market
their 1920 crops.
The farmers Of the country con
tinue to hold the key to the credit
situation. They huv not liquidated
their produce. They continue to
hold their grains in the expectation
Of forcing prices upward, and that In
spite OF the great drop which corn,
wheat ana bats made this month.
uutll the farmers are willing to mar
kct their grain. the credit situation
cannot become healthy.
\ great many small town banks
lent money last spring to farmers for
! development Of the farm area. OK
pectinE the louns to be liduidatud AZ
the crops were marketed this fail,
Those loans for the most part have
not been liquidatcd ana AK a result,
reports have begun To come In at
bank failures In farming Communi-
ties. The large city banks ave had
t. take care Of u great many OF he
country banks which are carrying a
/ ntNNA nhIhNn u lhAH HAltl anu AtAAAs
OF course, weakens the ability OF the
larger banks to take ccre OF the needs
Of Industry. All Of those things, to-
gcther with what might he called the
psychology of failing markets. have
tended To decrease the volume OF
production by the industries Of the
nation.
Retailers stocked with high priced
goods are hcsitant to sell at u loss;
as a result. their goods remain on
the shelves and thu retailer, seeing
his stock remain stationary, is not
willing to buy anew. The wholesaler,
awaiting the pleasure Of the retailer.
finds himself without prospective or
dcrs ana he. Of course. Is slow to
place his order with the minufac-
turur. And so II goes down the whole
line q .Itil II reaches the producer Of
The raw material OF almost every
commodity.
What the ultimate cmcct will be II
II hard to toll. but because OF the
elasticity OF our credit structure
through the agency Of the federal re-
serve system, II seems very probable
that prices are going 10 continue 10
decline through the winter and that
probably the end OF February will
sec tho low cbb In this period Of de-
f.Rtion
By that time wages will have been
affected materially and that and
other costs OF production will have
leen reduced. Retailers will have be-
come convinced beyond any doubt
that all must follow the downward
trend. stocks will begin to nov once
more; orders will begin to flow
through the ordinary channels; the
farmer IN longer hold bis grain
because he must have money for the
planting season. There will be add
tionnl business failures. OF course, hut
the Industrial needs OF the nation will
be taken car Of through the federal
reserve system SO that they Will not
have to be restricted beyond the
point where the supply Will rot be
sufficient TO take care OF u normal
demand.
Extreme caution Is Charactcrizlng
the activities OF every business and
even the individual is manifestiug a
thoughtnulness about the value of his
dollar that he did not seem TO possess
six months ago. II has become uni
versally admitted that the people OF
the nation are now paying the fiddler
for the dance OF extravaganza
through which they whirlcd Tor three
t%houghtloss years, and II is amusing