Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-05-12

speculation even if it had, money: but
it believes strongly in the early COM
ing of another era of. higher prices,
during which money will be much
freer than it now is with conditions
generally of the kind that are COM
monty described as good times.
Surely no one has forgotten the war
time expansion, especially the upward
squirt of everything that became so
apparent in the early. part Of 1919, how
things went sky high and speculation
in lands, stocks and everything but
past due indebtedness, rioted on
through the spring of 1920, until later
in the summer, when the steadily clos
ing lid shut suddenly tight and brought
people to their senses with jerk.
In this country the average man eX-
plains the expansion through the high
prices of cotton, corn, hogs, goods, mer-
chandise, real estate and other prop
erty generally; but even yet few OF
them realize that the real cause of all
these high prices was the cheapness OF
money, and that the cheapness OF
money was due to the low discount
rates of the Federal reserve banks.
But ask the man who in 1919 had no
trouble>fn borrowing all the money he
wanted, and more than he had any
business with, at and per cent. for
sixty or ninety days or even six
months, and he will tell you how for a
time he had no trouble in getting ex-
tensions; that this condition continued
until the spring Of 1920, and then after
having agreed to higher interest rates
on his next renewal, when he again
tried to shove pay day off for three
months more, he was told that he
would have to come across immediate
ly. OF course it was not that way
with all; but it was so with many,
and when they went to sell cotton or
other property TO take up their loans,
values had already declined to points
below the deadline.
There was more. or less quarrel with
the local banks and individual capital
ists-with everybody and everything
except the real cause, and even up till
now very few of them realize how
much of the trouble was due to the
fact that the Federal reserve banks
had raised their discount rates from
1-2 per cent up to per cent. and
over. The truth about the matter is
that these discount rates had been
raised for the very purpose that had
been mplished-increasing the pur-
chasing power Of money, making 1t
scarcer and harder to get and putting
q stop to speculation that was about
to get beyond bounds. f
And what reason is there to believe
a change is imminent now? Well the
change has already become more or
less noticeable 1t is.a matter Of COM
mon knowledge that the discount rate
Of the Richmond Reserve bank has
gradually fallen to 4 1-2 per cent, and
weak at that. All kinds of stocks and
notably steel stocks are rising, the cot
ton market has been noticeably strong
er of late, Notwithstanding the idle
mills" and the price Of living, generally
is running steadily higher. ......
Did you'read what Governor Harding
of the Federal Reserve bank told
Southern Wholesale Dry Goods asso-
citation at Birmingham, Ala, Wednes-
day. He told them to "set their houses
in order and do business for the boom
is onI' That is about the effect Of it.
And do you think he said it just to
make them feel good? Well he didn't.
Harding is the man more than any
other who has the matter within his
control. He is the man who put dis
count rates up for the purpose Of
causing deflation and he is the man
who some months ago commenced
putting them down for the purpose OF
causing expansion. He has the full
control of the ebb and flow Of the life
blood Of trade and he knows exactly
what he is talking about. He would
be more Of fool than anybody has
accused him of being If he had talked
to the wholesalers that way without
knowing what he was talking about.
Yes The Yorkville Enquirer is per-
suaded that the general situation is i'm
proving; but it does not want any Of
it's readers to deceive themselves on
account of what it is saying. 1t. is no
time for wildcat speculation. 1t is no
time to play fool, dreaming of the de-
lights of quickly acquired wealth, for
whether the. signs of the times are
correctly Interpreted or not the best
and most sensible thing for any man
to do, especially if he owes money. is
to pay his debts at the earliest possible
moment.