The Dawson news. (Dawson, Ga.) 1889-current, 1921-05-24
CREDIT IS BETTER;
MONEY IS AVAILABLE
BILLIONS ACCUMULATED BY
FEDERAL RESERVE TESTI-
FIES TO CONDITION.
PEOPLE PRACTICING ECONOMY
By Harden Colfax.

WASHINGTON, D. C.-Ten bill
lion dollars in potential credit for II
nancing the legitimate demands OF
business-a tower OF financial strength
so huge that its dimensions STIR the
imagination to bewilderment-has Deen
built up through thrift economy and
sound policy by the banks OF the ted
eral reserve system during the twelve
months ending today.
That vast sum OF credit capacity
stands untouched, an unanswerable eX-
ponent of the soundness OF American
banks and of the skill with which
they have weathered the storm.
One year ago today the strength OF
the federal system was at its lowest.
On May IA, 1920, there was available
in the keeping OF the system tree gold
gold which could be used as the ba-
sis for credit-amounting to only
S20l 100000. 1t had never fallen so low
before. The reserve percentage at that
time was down to 42.2 Per cent, but
little more than two points above the
safety line of 40 per cent.
Today the amount of free gold IN the
SYSTEMS keeping, available as the
foundation for credit, stands at ap-
proximately $810,000,000, the highest
figure ever reached, topping the rec
ord of $804,000,000 attained June Il,
1918. And the reserve percentage
stands at $50, setting new high mark
for the year.
Analysis Of the statement just issued
by the federal reserve board shows,
therefore, that the American people
have ben practcing the homely virtue
of economy for a year today. The sys-
TENS records show accurately by the
measure of the dollar mark as applied
to the amount of free gold that the
recovery began from the week OF May
IA, 1920, and that nationwide econo-
my was slow and faltered during the
first few months thereafter. By fall it
was in more general favor. On jan
uary l nearly everybody was prac
ticing it to a degree, for free gold re-
serves had risen on that date to $780,
100000.
During the winter, the records
show, the buyers strike came into its
own. There was tremendous shrink
age in the demand for money with
which to buy goods, so much so that
5000, 000,0 600 in reserve notes was with !
drawn from the amount of currency
in circulation. That means the volume |
OF federal reserve notes in circulation |
is less today by nearly So for every |
man, woman and child in the United !
States than it was the first of the year.
1t also measures to some extent the |
rigor with which the buying public !
applied the lash to wartime prices
Another factor that helped nightly |
to build up the vast reserves of credit |
to which legitimate business may turn |
in its hour of need was the great /
amount OF gold which poured into the |
country during the winter 1t is esti-
mated that nearly $300,000000 in gold
has come to our shores from abroad
since January |, all of which is So
called free gold, or gold available for
extending credit.
Thus, as the reserve banks stand to-
day, they have fund of $4,000, 900
in actual gold on which loans can be
made to their member banks. And as
the law provides that currency loans
equaling two and one-half times the
amount of free gold can be made the
federal reserve banks have a lending
capacity today for more than $1,000
100000
Available Only to Banks.