Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1921-01-14
PROGRESS OF DEFLATI0A !
Operation a Success But Patient
Is Almost Dead.
HOUsTON's sTuBBORRNEss IS RUlaBus.
MIR. McAdoo Who Organized tho ;
Federal Reserve System and Who
Knows More About it than Any
Other Man Sees the Mistake That 10


Knows More About it than Any
Other Man Sees the Mistake That 10
Being Made.
Manufacturers Record, Baltimore, Md.
The mass of misinformation being
PIT out by financial writer's as to So
called liquidation leads to the suspic-
ion that they regard the American peo-
pie as nation of fools. 1t will require
considerable more ingenuity than has
been shown so far to convince: the
public that bankruptcy is preferable,to
solvency and that conditions are stable
only when suffering is acute. .2;s,::3;': .''::3;
One William Justus Boies who writes
every Monday in the New York Herald,
rejoices as he observes that "it takes
everywhere much less bank credit to A..
nance trade and industry at the OPEN
ing Of 1921 than it took IL months ago,
which means that every $1,000, ,000.of
borrowed money will do the work
which required $1,3oo,o00,'to do a year
ago." That is intensely interesting, but
why not follow it through to the zero
hour? By breaking up, all trade and
industry there would be no need for
any bank credit at all. We have the
great bank industry apparently boast
ing that it was not strong enough to
carry on legitimate business, but now,
by grace Of the Federal Reserve Board,
1t has put business In a stupor'and can
handle it. Oh finance, what crimes are
committed In thy name! -
From Washington there comes a
press dispatch to the effect that "of-
ficials did not conceal their grave con-
Germ over the probability that other
millions may join the ranks Of the un-
employed" Also the Federal Reserve
Board again repoits that fthe general
business situation is fundamentally ex=
cellent and the banking structure
strong, but production in, some lines
has been cut 40 per cent. to rs per cent.
The patient is dead but the operation
was success. During the summer
treasury pronouncements were under-
taking to tell the people that the de-
flation program had actually increased
production. If one read enough sof.:the
treasury propaganda; he might, a!most:
get ready to believe It to be O. fact that
ample credit has been available tx
legitimate business purposes. He might
even be encouraged thereby to try'sto
negotiate loan. Then he would learn
the truth, as so many thousands of men
have learned it by PERSONAL experience
during the past few months. a.,
But we have good reason to suspect
that not even all the members Of the
Federal Reserve Board either believe or
approve the statements which the boaRd
issues. Mr.. McAdoo Is not financial
outlaw who stands in a desert by him
self. When he says that defiation has
been carried too far and that an cas-
ing-up process is absolutely essentiai'
he is expressingI views, we dare say,
that are not without an exponent with
in the board itself.
Mr.. McAdoo was head Of the treasIlEE
while the war was being financed. Mr..
McAdoo organized the Reserve system.
Mr.. McAdoo knows more about how
that system can be employed Ito ienS''
courage or to depress business than
any other man in the >countfya. !. Mr..
McAdoo is not deceived by clever
phrases intended to conceal the truth.
He can tell spade when he sees one;
and that is why he emerged FROM prf-
vate life long enough to warn tht ma
ton that the Federal Reserve Board Is
all wrong on deflation, Is engaged ina
ruinous programme and ought to call
a halt while there is still time. AS be-
tween the textbook verdict Of Secre-
tary Houston and the practical decis-
ion Of former Secretary McAdoo, the
country prefers to follow McAdoo.
There will be easier money in the
United States because there must be
easier money. Some private instltu-
tions are already making their own
money and it is passing current in
their communities. II the Federal
banking system cannot supply essen
tial credit, the people will find a way
to create their own credits. The pres
ent policy of the Federal Reserve
Board is more dangerous to the welfare
of the country than all the anarchists
within our borders. 1t has more than
$2,500, 100000 in credit that it could
legally release without endangering the
inherent strength of the banking sys-
tenn. It is deliberately depriving the
business of the United States Of nec-