Amarillo daily news. [volume] (Amarillo, Tex.) 19??-current, 1921-03-16
By Willis H. Booth

The wartime and post war changes
In commodity prlcoa and tho accom-
n.ny.Hg industrial rcadi1slmcnt have
resulted IN conditions which are pruyid.
INK crucial test Tor the country's
banking organiNtion--a test Of IL
ability to maintain n sound credit posi-
ton while nj The same time meeting
the essential requirements ~ business
Tor crodi, accommodation.
The Houndncss ~ the credit structure.
Of course. IL a primary requisite In this
or any other period. Closely associated
with that Inherent suundncsH h the
question ~ the feasibility and adnpta.
billiy II the credit machinery. II
soundness ~ tho credit structure can
b. preserved. together with sufficient
flcXihillty. then Tho Industrial rcadiusl.
monruuw under way may cunsummnt.
od with minimum Of hardship tu
business interests
We may arrive az better under.
standing ~ the problems presented by
the credit situation. perhaps, II We re-.
call some ~ the important factors that
have created present conditions The
tremendous LOSSES caused los the World
War, uf course were primarily rospun.
siblc for the existing situation. And.
while II u impossible tu arrive at an
accurate computation ~ the costs or
20 reduce all uf them to u monetary
basis, II may be- helpful to remember
some reasonable estimates which con.
sc,,atlycly place. the gross monetary
los az approximately iva hundred bill.
lion dollars although other estimates
run ~ hirh ~ three hundred and
thirty seven billion dollars the known
dead nj ten million. and seriously
wounded al six aud quarter million.
thc total property loss at thirty billion
dullaru. the lusH IN mnn.puwcr. muaHur.
cd IN money, NJ one hundred and
/ 'Ighty hillirn dollars, and thu national
debts ~ the world In 1890 az two hun.
drcd and ffiyiivc billion dollars. ~
compared with fnrtyfour billion dollars
In l9ii
/ To meet the cXigvncics uf war and
IT. aftermath production and distribu
tIuu IN the United states, u N cHti
mated, has bccn increased 20 per cent
since 1914. Commodity prices gencr
orally increased 90 per cent from 1914
20 the peak In February uf last year
and they have fallen only 20 per cent
This necessarily created a tromendou,
and unparalleled demand Tor capital
While deposits In the banks increased
from eighteen and half billion dollar'
In 1914 to thirty.thrcc and u half billion
dollars In 1890, loans AMI discounts In
creased from fifteen billion dollars II
1914 10 twenty-five billion dollars IN
1890
The ptfiud NJ unusually active husi
ness and rising prices following th'
war characterized by wave ~ oxtraVa
CUNT buying by domestic consumers
was early recognized as tending to re
suit In oycr.production IN various liner
~ industry. Speculation was rampant
Capital expenditure In preparation foI
meeting the unusual demand on III,
part " thu public fur goods naturally
tended tu be- excessive In many In
stances In the first ten months o
1899. industrial financing broke al
records. with an aggregate IT more thar
two billion dollars IN bonds, notes an,
s,ocks During the corresponding per
lod ~ 1919 the amount tutalled mor'
than one billion siN hundred millloI
dollars which was the record up Il
that time.
Thh roriIl WuB nlsp charactcrizc'
by extraordinary demands un the par
of foreign countries Tor American
goods II was "a be- expected. however
that with IN" progressive industrial
lrccuporatlOn ~ the recently brlligrrcn
countries there would b. "a reduced de
mand eventually for American goodi
In those markets. Aud domestic buy
INK rould not o. expected tu c0ntinu'
Indefinitely uu an vNtrayagnni scale
accordingly, IN order in foroslall th'
possibility uf an extremely dangcroui
industrial situation In this country, I
brcamc necessary u check the iurih"
expansion of bank credits IN general.
Tho logical corrective Tor threaten
Ing oNeroNpnnsiun was the raising 10
discount rates. accompanied bv puf
pose to restrict credit accommodation
g. those borrowers whose collateral
gave promise of retaining safe mhrgi'
~ value under conditions uf probabl