The Brunswick news. [volume] (Brunswick, Ga.) 1906-2016, 1921-12-22
A sIeNPosr ON our ROAD.

up can get money at 5 per cent from
the Federal Reserve Bank, What
does this mean. What is behind the
reduction Of the Reserve Banks reds
count rate from IL to per cent
1t simply means that the Federal Re.
serve bank has a large accumulation
of money stlfats IT. would like to loan
And what does this accumulation OF
money meafi? It means that there is
very evidently general Improvement
throughout the country in business,
and that in the South, where this
reduction occurred, there is a partic-
ularIy better. outlook. for the re-dis-
count rate in fffe' South is smaller than
id some of the other Federal Reserve
.centers, says the Savannah News.
The rate early this year was 7 per
cent. Then it went down to 6 and
then TIC IL. The new cut to S per
cent, coming right in the holiday sea-
son is taken to mean that money is go
ing to be easy at the beginning of the
New Year and all sorts of conditions
will be ripe for an era Of development
along all lines-as such an era may
be expected when money is accumu-
lated and the rate the borrower OF
money has to pay for its use is low.
The cut in the discount rate has been
iikened to putting fine oil in the cogs
and bearings of industrial and dgricul-
tural machinery-things go smoother,
more power oftdeveIopment is produc-
ed with less friction.
Consider that in less than year
this rediseount rate has been reduced
from Z to 5 per cent This means
that the man who wants to borrow
money to build, to enlarge his plant,
10 go into new business, to do any Of
the manifold things for which men
wish TO borrow money can borrow
money more cheaply than he could. a
year ago; and the fact that he can
borrow II cheaply is directly traceable
to the fact that the money accumula-
lion is large enough to cause the Fed
eral Reserve Bank to make borrowing
more attractive for the borrower
The rate goes up when, money gets
scarce in the bank; 1t comes down
when money accuhuIates. The law
of supply and demant Is the determin-
ing factor here And II follows that
as money is easier to get, as the bor-
over finds it easier to borrow money,
business lis bound to become mora
brisk, there is bound to he more
building, more charging, more activ-
ity generally, which causes more jobs
for more men. fatter payrolls, more
customers for the stores, more buyers
Of the things the farmers produce,
more 81 everything that good for the
business alike of community, state
and nation.
That's what we all want; more bus
mess activity, and the cut in the Fed
araI Reserve Banks rediscoult rate Is
Just a big sign post which shows the
way we are travelling 1.-The way to-
ward more business, more employ
ment. better conditions generally
for all of us. 1t means that more
money Il going to be put to work for
all of US. II means general loosen
Ing up. a general mbricating, for cas-
Ter motion of the wheels OF trade, IL
means that the llfeblood OF activity,
Of business. of employment, Is getting
back into the nations veins. When
money can be had at rates attractive
20 the borrower. business activity fol
lows. That has happened through his
tory. and II will happen this time. We
can all be sure of that. That Is why
The Morning News directs special at.
tention to te action Of the Federal Re.
serve Bank of this district in cutting
is rediscount rate at this particular
time. The signpost Is one that we all
are glad 20 see virtually at the hegin.
ming OF the new year. Wessae the road
plainly now. Let's all get ready to
travel il, 1t points in the direction we
@ll want TO so and keep on going, Our
destination is prosperity.