Evening star., 1921-06-25
n FUNDAMENTALLY this country
- ia sound. aE Y,
Temporarily its business is


i'll.
1t is a god thing when we are sick
to become we'll again. but it Is q bet
ter thing to seek a way to stamp out
our malady for all time to come.
There was a time when men and
women looked upon smallpox as
scourge from God. terrible but un-
avoidable. This was before we learn
ed how to combat 1t. Today smallpox
Is no longer a plague.
There was a time when whole COM
munities were shattered. and-in an
economic sense-were all but ami
hilated by terrible crop failures. The
farmers still have their troubles. Crop
failures are still reported. But mod
ern crop failure is mild. indeed. COM
pared with the devastating ruin that
befell farmers in previous decades
Crop failures are no longer a plague.
believe s;nan, Is III aanes Xsn
siona are plague that could be
stamped out II We but knew what
to do.
Can We eliminate this disastrous
ening downs? believe so.
Can we make prosperity permanent?
In fact. 1 know that this present
period Of depression is less serious
than 1t would have been had we not
done >certain definite things to fore
stall the trouble. We have made a
small start. The big question is how
to finish the job.
Balance Sheet Of Business Conditions
Before we try to work out a solu-
tion. I would like to make a few i'm
portant entries on the balance sheet
OF business conditions. showing how,
after Ia
setback, we have grown stronger
and richer. and fundamentally more
prosperous: and then contrast with
this steady upward climb the uneven
path we have actually traveled-the
rushings violently upward, the stag
Eerings far, too far, downward.
Only once during the past seven
teen years has the fundamental
growth Of the United States been even
temporarily retarded. Steadily. year
in population, wealth. and business
activity. excepting only during the
one year following the serious panic
N spite of temporary up. and
downa., we may expect that the funda-
mental strength Of the United States
will keep on increasing regularly.
There are numerous reasons to sup
port this belief. -
Better Banking System.
For the first time in the history of
tho United States. we have a flexible
banking system properly functioning
one knows that our old national bank
act WAS product Of the civil war.
It was passed wholly as a war meas
ure back In 1864-65. 1t failed to ac-
complish many of the things antici-
US a basis for banking for half a
century. Defects of the national
bank act were pointed out repeated
". The chief defect of the act was
risidity of the currency. When
money was needed IT was scarce and
it was abundant.
It was pointed out repeatedly that
the defects In the bank act would
eventually lead us into a financial
taught in our economic and dLan: :ial
: text hooks. 1t was not until the
panic Of 1907. however. that anything
Of q constructive nature was done.
Shortly after the panic of 1907. a
monetary commission was appointed.
which made an exhaustive study, of
the financial conditions, not only Of
the United States. but of the leading
European countries. The result of
this Investigation led. after a series
Of changes, to the federal reserve act.
giving us the federal reserve banks.
WhileS these federal reserve banks
with the Federal Reserve BOARD have
been functioning only a few years,
they have been of distinct service.
They have given US flexible cur
rency and have appreciably minimized
the evil effects of abnormal periods.
Had it not been for the operation of
the federal reserve banks, we should
have experienced before this a more
drastic panic than has yet occurred.
The banking situation in the United
States long since has passed the
crisis period and now Is fundamen-
tally sound.
StandardixStion.
The war taught some very valuable
lessons. Among these are standardi-
Sation and the elimination Of seasonal
fluctuations in business. Standardi-
Sation increased greatly during the