Evening star., 1921-05-01
BY /. A. FLEMING,

Herbert Hoover Secretary of Com
merce, is friend of publicity.
He advocates the widest publicity re-
garding business conditions, that would
tend to ward off such debacle as devel-
oped in the closing months of 1920 in the
mi-panicky condition in which indus
trial corporations and retailers the coun-
try over found themselves. in the
practical suspension of the buying
movement, coming practically out of
clear sky and totally unexpected.
The manufacturers did not antici-
pate the development of the buyers
strike against the prevailing high
prices. and consequently We're loaded up
with high priced stocks. to their great
loss. to the Wiplng out of much of
their reserves and to the turning of
great prosperity into serious dullness
and the loss Of employment by tens of
thousands of workers.
The jObberS did not sense this
movement until cancellations of con-
tracts by the hundreds told the story
of the spread of the great silent
strike and the retailers. totally un-
prepared for it. Cancelled orders and
made frantic efforts to reduce inVen-
tories by partial reductions in selling
prices, which buyers would not con-
slider.
Secretary Hoover believes that
hands on the pulse of commerce, II
it be the hands of trained observers,
familiar with conditions and COM
pairing observations the country over.
may detect these conditions as they
develop and. through knowledge
thereof. disseminated broadly. viii
aid in checking or remedyins the
matter before it reaches the dis
astrous stage.
If a manufacturer knew that busi-
ness was Stacking very generally all
over he would slow down on produc-
ton. the jobher would not be 80 anx-
ious for orders, fearing cancellations.
an awful club in the hands of mer-
chants and one that should not be
used save in emergency.
In the 1920 cataclysm the merchants
shelves were stocked simply because
they could then get the goods, as
against the desperate efforts for even
partial stocks the year before.
They will not be caught again for
many a day. as they have learned
their lesson--in the midst Of pros
perity keep weather eye out for ad-
versity.
navigator than the experiences Of
the past plus the latest weather re-
ports, storm signals. etc.
Full publicity is always better than
paucity of reports. even if they are
not of the character we would like.
Full publicity of the prevailing
conditions the country over would
have greatly reduced the swollen
inventories. the "froZen'' credits and
other features that later contributed
to depression.
Much of the worst of industrial de-
preston came when the drop in the
prices of grain. etc. cut down
ha farm
er and the planter and made 1T
next to impossible for this class of
producers to make any curtall in
their banking obligations.
Full publicity may not prevent
troubles. but it will certainly help
some to know the conditions existing
and to reduce materially the full ef-
feet of expected developments when
they materialize.
Publicity is desired in all things.
There should be a law forcing cor
porate publicity above all thlngs;
close to or near the rocks and their
shareholders confidently hold on to
their securities, while the captain
and his mates throw their hoidlnss
over on their fellow shareholders,
who are thus made to carry the bag
with it's contents or lack OF contents.
Mr.. Arthur Reynolds Address.
The dinner of the District Fanker
Association at the New Willard last
Tuesday night will long hold the dis
tinction of being one Of the greatest
functions of its kind. 1t could have
happened in no other city than Wash
ington.
The guests included the President
and Vice President of the United
States. four members of the cabinet.
senators and representatives Justices
and Judges. the controller of the cur
rency, over 545 of the active govern
mental and business men of the ma
tiOn's capital
The guests .cheered to the echo the
declaration by the President that
"business should not be hampered by
red tape" and that he wanted asso-
ciated with the administration, not
theories but successful men
And business, very generally cheered
up and encouraged, progressed a little
further to recovery for these state
ments.
All the speeches We're excellent,
but the talk of Arthur Reynolds,
president of the Com
mercial National Bank of Chicago--a
were and are. by a banker to bank
ers was so thoroughly under
standable, so plainly set forth, such
concise and matter of-fact state
ment. that it was listened to word
by word from the start to the finish.
and no auditor paid closer attention
than did the President of the United
States.
Mr.. Reynolds prefaced his address
with the statement that the middle
west has all the troubles that are
profiteering and extravagance. high
o,;r hi ful n M
buyers strike; big inventories and
big losses, big crops and shrinking
values We have housing shortage
and landlords and tenants in death
struggle
Despite all these. he declared, eve
are neither Gisheartened' nor dis
cOuraged. We believe in ourselves. in
our government and in our country.
We know that we will work our way
out of difficulties and come again
to prosperity.
War Is destroyer, not creator,
and the supposed wealth that comes
overnight is a fictitious wealth."
A Credit Machine.
Now, commercial bank. as 1
it does not create credit, like ma
gician, out of nothing, any more than
a steel mill can integrate rails out
of air The steel mill must have ore
and business must buy and sell to
create the credit on which bank
can function. The bank vitalizes the
credit which business crcates-that
is. it distributes funds. based on
promises to pay, to those Industries
and localities which are not only in
greatest need but are socially the
more necessary. Bankers realize and
must continue to accept their moral
to further business stabil-
ity. Always in the fulfllment of this
high duty the banker must take ac-
count of the reserve position.
This distribution of credit is the