The Birmingham age-herald., 1920-05-22
MARX SAYS MONEY IN POCKETS OUGHT
 ID GO INTO BANKS
Conservative Board of Fed eral Reserve Will Prevent Any Danger of a Too
 Rapid Deflation

According to Otto Marx of
 Marx & Co.,, brokers and
 bankers, there is mo danger of
 serious condition arising out
 of the deflation process now
 under way in the country.
 His reason is that credit is abso-
 lutely controlled now by the federal
 by this conservative institution that
 will do harm to the legitimate inter-
 ests of the country"
 Mir Marx says people in general are
 carrying too much money around in
 their pockets. He believes if this un
 necessary withdrawal from banks was
 converted into bank deposits that the
 banks would soon have hundreds of
 millions of dollars in deposits avail-
 able ''in establishing more credit" DEFEATING INITIATION He continued:
 'sThe federal reserve board, realizing the dangerous imitation
 that was prevalent in the country caused by enormous flotations of government securities, which were necessary to carry on the war. and which were deprecfatinE the value of the dollar to n dangerous ex- tent, decided to gradually curtaii all unnecessary credits in the country.
 An enormous speculation was going on in stocks, lands sugar, copper and commodities. The start was made when the coal loan rate was put at figure which prohibited speculation in Wall street and the amount of was restricted. The result was a de-
 cline in stocks and curtailment of speculation.
 Banks throughout the country are now loaning money for legitimate pur- poses only: large stocks of merchan-
 disc and raw materials which were
 held for speculative purposes are now being liquidated, the consequence of which brought a reduction in prices.
 NO DANGER IN SITUATION "In my opinion there is no dan ger of a serious condition arising, for the reason that credit is ab- solutely controlled now by the federal reserve board and nothing will he done by thfs conservative institution that will do harm to f the legitimate interest of the 1 country.
 l Building new houses and similar l improvements are almost at stand | still on account of high prices for l building material. There should be a | satisfactory steel business for the
 next two or three years, due to the 1 fact that the railroads have not been | purchasers of steel in any quantities | since the war.
 | flation that is now going on through | out the country will proceed in an or derly way, and when this is over we ] should have the greatest legitimate prosperity the country has ever | known.
 "If the people would realize this Is l the time to save money and keep it in | the banks or invest it in good securi- i ties so 1t will become productive, it would assist very much in the defla- : l tion. The population of this country l is approximately 110,000,000. If peo pie would not carry cash in their pockets and keep it in the banks they, no doubt, would increase the bank | deposits hundreds of millions of dol l lars, which would be quite an item in
 establishing more credit. l "The golden rule for America should | be: Save, work hard and increase pro- | duction.' This will drive out bolshev- {, ism and get us back to where we | were before the war"