The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1921-04-22

utEcr' OF world wide REIMBURSEMENT would
as. although everybody knew that there
must b. a decline in prices eventually.
The national nervousness over the econ
umic situation reached its height last
f.Gl Nftrr christmas things beca me
more normal but il is absurd to think
that a readjustmsnt such as that which
foi.uwe Ell the abnormal conditions exist
ing during ami after the war can he
mad. over night. Il is idle for people to
dctude themselves by fancying thai
property can hc restored or wealth Gre
atnd by any Legislative legerdemain. We
can't Icgi$tata ourselves rich. but work
and thrift and common sense plus that
important factor. time. will bring about
the necessary REIMBURSEMENT.
Answers Criticism.
Banks do not create conditions and
should never attempt to do so. Such
a situation would be financial domino
zion and the American people would
never submit to such q state Of affairs.
Thu banks of the country and tho fed-
eral reserve board. can, however. do
much to modify or ameliorate conditions
already existing. The federal reserve
board has been criticised as having
changed the present financial situation
from one OF initiation To depression. Tho
charge Is unjustifiablc and cannot lie
sustained.
In June. 1920. the federal reserve
board issued L warning by raising dis
count rates. This was necessary rs
step 10 preserve the integrity OF federal
reserve banks. The condition which
neceSsitated this action was not created
by the federal reserve banks or the fed
cral reserve board. II was. however.
foresene BY the board, and a storm
warning WAS given. Credit was not de-
flated but was rather expanded so that
tho federal reserve system might absorb
the shock Of the Inevitable wave OF de-
preston.
Enormous deduction E.
THE need OF an elastic currency dur
ing periods OF financial depression made
itself felt in the panic OF 1907. At that
time there was no way to relieve this
condition except by purchase Of govern
ment bonds. The national bank note
was an admitted failure as means OF
increasing the elasticity of currency.
The federal reserve systems provided
this needed elasticity. All through 1920
federal reserve note issues increased
steadily till they reached their highest
point before September. Since Christ
ton. There has been remarkable IN
flux OF gold into this country since De-
cember. This. with other contrlbutory
cauSas has increased the reserve held by
the federal reserve banks.
The importance Of the maintenance
Of the federal reserve system cannot be
overestimated Tho federal reserve
banks of IN country are the ultimate
custodian OF the peoples money. The
member banks hold the savings OF the
people. When their reserves run down
they may renew them by shipping cur
rency to the federal reserve banks or by
rediscounting paper which they may IN
turn redscount with their customers.
sympathizs with Farmer.
"All this year we. in Washington.
have been aware OF certain conditions
existent. The officials Of tho federal re-
csrve system sympathize particularly
with the farmer. The process OF read
justment has not been uniform. Ger
tain staples produced by the farmer
have been selling at less than pre-war
: level: at laaSS than the cost OF produc-
ton in some cases. The farmer Is ma
turally disturbed. I am afraid that there
is no way to save him from mourning
severe losses on the products now on
hand. but 7 am confident Of an ultimate
readjustment which will protect the pro-
Queer from such losses in the future.
The conditions existing should not be
| blamed on the banker. or any group OF
bankers. Bankers. are, it is true, eau
tious nowadays. They are less inclined
to take chances than formerly. At the
same time the bankers In general feel
L moral obligation to stand by the credit
tors they already have. II Is a case
where We must prime the pump before
We can draw water. 1t behooVes the
federal reserve banks and the member
banks Of the country to adopt live
and let live policy. believe that any
loan made now on reasonable security