The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1920-05-17
To HALT THE
LUXURY ORGY
TURN CAPITAL TO THE PRODUC
TION OF NECESSITIES.

Washington, ID. c. May 17.-How
to halt the orgy of spending on lux
uries and other non-essentials in
which Americans are indulging and
divert capital to increasing produc-
tion of necessities, which will reduce
the cost of living, is a question that
will be considered by the leading
bankers of the country in a confer
ence with Secretary Houston of the
treasury department and the federal
reserve board next week.
The principal suggestion TO be dis
cussed is that the reserve banks and
the bankers take concerted action to
curtail the advance of credit for the
production of non-essentials in an eff
fort to stem the wave of eXtrava-
gance, on the theory that the peo-
pie will stop spending when there are
no luXuries to buy and capital will
be forced into the production of ne
cessities when denied the more pro-
fitable field of non-essentials.
Preparations being made for the
conference indicate that it will be
one of the most important held so far
on the credit situation in the United
States. A wide range of questions
will be considered, all bearing on fin
ancial reconstruction measures TO
check and reduce initiation and other
wise direct the nation back to normal
conditions from the financial and eco
nomical excesses produced by the
war.
| The suggestion of action to check
the orgy of extravaganza has grown
! out of the failure of the expectation
that the cost of living would begin
to decline by this time and the in
creasing evidence that the wave of
reckless spending has not abated, but
even is advancing with the financing
of the production of pleasure cars,
fancy wearing apparel and other lux
Nuries assuming huge proportions.
One assertion frequently heard is
that farmers are unable to secure
nails, wire and other articles of iron
because of the. prodigious demand
for steel in the motor car industry.
One of the most effective ways to
bring down the high cost of living, il
is contended, would be to curtail the
production of luXuries and divert cap
ital and labor to increasing the pro-
Nduction of essential foods and cloth
ing. There are numerous difficulties
to be faced by the conference, how
ever, in dealing with this question.
The impression prevails that sucI
action as may be taken along this
line must necessarily be of a general
nature. Beyond blanket power C
restrict loans, the federal reserve
board has no specific authority by
law to define essential industries and
non-essential industries. There seems
to be no purpose to define, in such g
way as was done by the war indus
tries board during the war, just wha
classes of industry shall be consider
ed essential of non-essential. Such {
task would present innumerable OBJ
stacles and cause serious industria
difficulties.
The working out of any genera
plan proposed at the conference
would rest, it is believed, upon th'
discretion of the heads of the twelv'
federal reserve banks. Officials ,
these banks may be instructed to us,
an iron hand in curtailing credit 70
nOn-essential industries and in deal
: ing with individual applications TO
, loans that do not appear warrantet
q by local circumstances.
There also will be discussion o
the present rediscount rates, but be
!. yond a modification of those now il
effect, general increases are not an
p ticipated
i Officials here believe the results O
the application of graduated and re
: discount rates in the Kansas City dis
! trict have been successful in restrain
: ing unnecessary use of credit.
K