Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-02-24
tBy Associated Press. ]

WASHINGTON. Feb. 23.-Dctermina
tion Of the Federal Reserve Board to
exert the full power OF the reserve
banking system in regulating and con-
trolling the credit situation--a course
designed to aid commerce and industry
IN restoring Il prc-war equilibrium
was disclosed in the boards annual re-
port. made public today.
with this as it's announced peace
tihc pollcy, the board was prepared to
Test the ability of the system 10 check
a,%nansion and TO induce healthy. liaui-
dhtion." The board explained II was
aware OF the implied power TO rectify
inc condition which confronts the
lowed the authority for and employ
incnt Of an elastic system of reserve
credit and note issue. it was added.
Seek ltcscrve Act Changes.
Accommodations also were made to
congress, for amendment of the reserve
act which would permit reserve banks
Vim approval OF the Federal Reserve
lines Of credit decentralization for mem m
Der banks. An ascending scale of rates
This. the board believed. would induce
banks 10 hold their own large borrow
e.s In check and thus work to the end
mat credit expansion on u large scale
would be stopped.
Warning was given that the coun-
lioii. While the board was in entire
sympathy with measures to overcome
THIS s,,s evil; it pointed out that remedies
create conditions worse than imitation
"DcHation merely for the sake Of de-
nation and speedy return TO normal
-deiiation merely for the sake OF re-
prices. to their pre-w;ir levels without
regard for other consequences would be
, wsrld aa RroSefdnf in !he posture Of
De !orfotten that productive Industry.
Il io profonndiy affected by crcdi, condi-
credit One OK i as lfe.rlt Is do nrinc on
Of crcdi, system mus, be found four 'e in
the production OF goods True in gen
crai. the truth>of this observation de-
the present dcranged stat. of 'I with IL
industry and trade when production is
t IT., crying need OF the hour every
Traditional Credit Control Method.
In explanation OF its increase in dis
count rates. the board said that this
cT cree oe cnn,r me traditional method OF
snpposes normal Conditions and these
~ was pointed out. do not all exist at
rae was shown TO nc, AS "A restrainine
influence upon borrowings. it may opor.
ate a.e as We'll TO attract supplies OF credit
among others. that was said bv The
D 10. TO make imperative the use OF
-, IN SoHtEOiIlNS credit and
In setting forces to work to check
expansion. the board declared much rio.
pended upon cooperation OF bushes.
ana the community generally. There
u.s. however. no need for drastic or
pFccipitate action" the report CON
tinucd. There need be no apprchen
SION as TO our ability to effect the
transition from wartime to peace
lime conditions. If reasonable safS.
guards against the abuse Of credit arc
respected. our economic and !inanciol
position IT, at the bottom safe and
sound. Extremes must be avoided. tho
processes OF adjusting the volume OF
credit TO normal basis should be
Effected in an orderly manner. and IFS
rapidity must be governed entirely BY
conditions and circumstances as thcy
develop.
Depends on Co-Operntion OF Hu.Ine..
Much Will depend upon the CO.
operation Of business. Without such
cooperation from the general com
nunity. progress can DC, neither rapid
nor substantially. .Shf.
y plea WAS made IN this connection
ioT complete absorption by investors
of outstanding portions OF war sccur:-
Ties issues
AS these pass into the hands OF per
nancnt holders and the national debt
is reduced by the operation of the
sinking fund. there gradually will
come proper balance between the
concrete things" the board explained
The specific OF greater production
was urged again one OF the methods