The New York herald., 1921-01-08

Federal Reserve Board to meet the situ-
alton were detailed at length.
BOARD Constantly ON job.
In continuing, Mr.. Harding said:
I'VE are fortunate In having so large
and SO self-contained and such va
riety of resources Now there was a
great deal OF mental stress undergone
all during 1920. The members of the
Federal Reserve Board were constantly
on the Job. We were In daily COM
munication by wire with all Federal
Reserve banks. We got all OF the re-
ports of the various Government depart
ments.
we felt that we had all the statistics
covering the situation not only in this
country but through the entire world
We realized the gravity of the situation
during 1920. and never for moment did
we lose the confidence in our behalf In
the Federal Reserve system to maintain
itself and to prevent any such general
disaster as might have been expected in
the old days before the establishment of
the Federal Reserve system. which We
experienced periodically and which Is
usually concomitant with a period Of
readjustment.
This process which we have under
gone has shown that we can obviate
this. 1t has been noticeable that the re-
suits of the readjustments have been
far more severe and the privations en-
dured and the sufferings greater In
those countries where the expansion OF
bank currency and credit has been
greatest. and that II has been less In
the United States than anywhere else.
While the reactions we have undergone
have been severe and have been very
trying TO those who have had to endure
them. yet when we look at them we find
in the cold light of statistics on paper
that, after all, the reaction has not
been as severe as is generally thought.
Gives Figures on Declines.
Assuming that the prices OF 1919
represented the figure 100. we find that
the prices OF farm products. according
to the index numbers furnished by the
Bureau OF Labor Statistics. at their
peak were 1876 per cent. at the present
time 1875 per cent. Of the price of 1913.
Foodstuffs at their peak were 213 per
cent. now about 1914 per cent. Textiles
at their peak, 275 per cent; now about
240 per cent. So when you look at those
figures why. 1t seems that the decline
has not been so violent as we have
thought. At the same time, though,
everything Is comparative.
Nov. I think We can In taking an
inventory OF our present situation con-
gratulate ourselves upon two things:
One iB that the country generally has
recovered to its normal state. We are
no longer afraid. We are not indulg-
ing In the old idea Of extravaganza,
living beyond our means. Nor are we
troubled SO much as we were a few
weeks ago with that other extreme
of over-pessimism. where people get
down In the tofnbs and they cannot
see any daylight, cannot see any hope,
see nothing but gloom and darkness.
Now that situation is as bad as the
other. They are both abnormal con-
ditions of mind and we can congratulate
ourselves generally that the country has
reached a more normal state Of mind
and the main thing is for US to maintain
that normal state of mind, II you please.
This Is not the time to try any
remedies for the purpose Of alleviating
or deadening pain temporarily. when
the ultimate effect would be not to re-
store the patient to health but to impair
his strength and his vitality We ought
to be safe and sound and calm in our
judgments In living and in financing our
selves.
II am thoroughly convinced that any
danger which may have existed Of
general collapse-and have never
thought that danger was so imminent
as great many people have thought II
was-but any such danger as that has
pessed
IT think undoubtedly that the worst
is over. And while the Federal Reserve
system cannot deal with individual cases,
IL they are individuals who have become
so much overextended that they will
have to undergo a process of readjust-
ment, we will have TO let 1t take its
course. The Federal Reserve deals
with general conditions. 1t deals with
the banking situation as n whole and
the Reserve position. The inherent
OF the Federal Reserve banks
has so much improved. that you need
have no apprehension whatever that the
Federal Reserve position cannot take
care of the banking situation in general.
1t can do so and 1t will do so.
Signs Of Trade Revival.
"As to the revival OF trade. there are
cf fun .ta he. kt.s