Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1921-07-29
BUSINESS CONDITIONS
(From Business Digest)

up bills during good times, and we
did it. Now we are paying our bills
under pressure. We borrowed fifty
cent dollars, so to speak now we
are repaying them with eighty-five
cent dollars, and as prices continue
TO come down, it will be necessary TO
repay additional dollars obtained in
boom times, with dollars which will
be twice as hard to earn. OF course
it is hard, and the worst is not over
Though prices have fallen greatly,
there is still further deflation to be
accomplished. We are paying the
penalty for violating economic laws
and all are guilty from the federal
government down Extravaganza,
perhaps justifiable under the nee
essity of winning the war, was the
order of the day. For several years
figuratively speaking, we were Dor
rowing ourselves rich. Now we suf-
fer because we must pay back,
But our people are looking facts
in the face. The country is MOI
broke--it is merely bent. Common
sense and hard work-honest work
thrift and economy will pull us
out of the hole. 1t is time to take
off our coats, go to work, take our
medicine no matter how bitter, suf-
fer our losses and benefit from orr
experience There have been times
before when financial conditions
seemed almost hopeless, but always
common sense has prevailed, and
thus it will be again.
We hear it said that Wall Street
is to blame for the present condi.
tion of bad business but don't be-
lieve it. Let us quote the advice
given by Wall Street two years ago
George f. Roberts vice president of
the National City Bank of New
York, in a speech to members of the
Iowa Bankers Association in June
1919, said: 81 believe that the
banker can render no better service
to the farmer than by advising him
to use the proceeds of these high
prices to pay off his debts It is a
singular fact that people commonly
go into debt in good times and pay
their debts under pressure in bad
times" That was the advice from
Wall Street two years ago. When
that speech was made, the loans of
the Federal Reserve Bank in Iowa
were twelve million dollars. The
war was over and the last war loan
had been raised A good crop was
raised in Iowa in 1919 and prices
continued fairly good until the fall
of 1920. There was more than
year of good times to pay off that
twelve million dollars, but when the
break came. banks in the state of
Iowa owed the Federal Reserve Bank
not twelve million dollars, but
ninety-one millions of dollars, That
same condition prevailed practically
the country over. There is only one
thing to do AS it is with an in
dividual, so it is with a nation
economy, efficiency. hard work and
saving. until there is restored that
which has been consumed or de-
stroyed
A slow but steady improvement
in the business situation is taking
place month by month Fear of a
financial collapse has entirely van
ished, has given way to a feeling of
quiet confidence that our industries.
taken as a whole. are gradually bet
tering their condition. The existing
credit strain is gradually relaxing,
generally speaking. Banks the
country over have reduced their bor-
rowings from the Federal Reserve
Bank to reasonable amounts, and
within another ninety days, after
the present large crops of the coun-
try have gone to market, there will
be still further liquidation of credits.
While it is true that deflation is far
from its end. and that we cannot
expect free and active business until
the values of various commodities
are nearer a parity, yet we must rea-
lie that prices are gradually reach
ing somewhere near pre-war normal.
To summarize-condit in this
country are good compared TO other
countries of the world We have
made some strides forward in the
readjustment process, but further
liquidation is necessary, and is in
eyitable The immediate future
holds nothing of particular en-
couragement but the fact that losses
are being sustained, personal ex-
travagances being somewhat cur
tailed. and that good old American
Horse Sense" is being used once