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X-3156
rro~Yself
In my remarks today I she.ll confine
mainly to a discuscion
I shall endeavor to lay be-
of some of our domestic economic problems.
fore you a. picture of .. condi tions as they exist today and to describe
some of the causes and events which have brought about these conditions,
and before closing shall take occasion to discuss the inequa.li ties in
the readjustment which has taken place.
tole,
r~cently
By way of illustration, I a:;J..s
by a. gentlerr:an from Oklahoma, whorr I met in Kansas City,
that he had just had a shave and a haircut,
He said that a year ago
when he was in Ka.nse.s City a shave and haircut cost him the equivalent
of one bushel of corn
ar~d
that yestr>rday his sb.e'l8 ,,_nCJ. haircut co.:;t :.tim
the equivalent of tl:ree bus'1.2ls of cern.
I rr.ay havs occasion .?lso in
the course of TT'Y remarks to say soa:ething about :profiteers.
years past and up to a few months a;o we
profiteers and profiteering.
profJ. teering.
he~r~
Put•lic officials
The public has winced under it.
For some
a gr?at deal about
~enerally
have denounced
Sometir.ces the stetemer.t
is maie that the Federal Reserve System is oren to the charge of rr-of:. V
ing.
~-r-
Such statements are based U!:On thE e~m.:::-:ss r.'adc •·y the Federal
Reserve Banks in the year ending
1920 'Nith respect to their
~aid
1919
and. !!'ere p.;"ticulerly in tr1e year
in capital, but critics disre;r,ard. the fact
~,,,~~.c~
~'
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;jf.,j
X- 3156
'
that there are other factors besides the capital of the Federal Reserve
Banks which contribute to their earning power.
The average paid in capital
of the twelve Federal Reserve Banks combined during the year 1920 was about
$94,000,000, pr 3~ of the capital and surplus of all banks which are members of the Federal Reserve System ; and their average surplus, accumulated
as provided by law and accrued profits total $143,000,000.
Figured against
paid in capital alone the net earnings of the Federal Reserve Banks for
tho ye~r l920, $149,000,000, were 158.41-, but the ratio to combined average
capital and surplus was but 62.9%.
That, however, is not all.
relies upon its deposits fori ts earning pow""r.
Every bank
If banks had to depend upon
their capital stock and surplus alone for their earnings, banking would not
lie very profitable and there would be very few banks.
use for joint stock companies,
loan out his own capital.
There would be no
for an individual could as well himself
The Federal Reserve Banks during the yr:ar held
,, reserve del)esi''£ of their member banks averaging daily $1,835,000,000.
~very
bank which is a member of the Federal Reserve System is required
by law to carry
its
~ntire
legal reserve with the Federal Reserve Bank
of its· District in the fonn of a collected balance, and must under the
law, maintain its full reserve at· all times or else be subject to penalties.
lf we consider the net earnings of the Federal Re"'erve Banks for the year
1920 as related to the t.otal of capital, surplus and reserve deposits, we
will find they amount to but 7 per cent.
p·.. ·.'/"·',t~
~
·- ..,-z ..
There is, however, still another very
import~t
'.j,j.
factor contribut-
ing to the earnings of the Federal Reserve Banks - the Federal Reserve
notes·, obligations of the Crovernmsnt, of tho TJni+.ed States, whir..h the
Federal Reserve Banks are permitted to have the use of under certain
conditions.
A Federal Reserve ]ank can deposit with the Federal Reserve
Agent of its District eligible paper which has been discounted for member
banks or otherwise
ac~uired
them into circulation.
and receive Federal Reserve notes and
put
The law provides that a gold reserve of not less
than 40 per cent must be maintained by ]'ed·eral Reserve Banks against their
notes in actual circulation.
This privilege, it will be seen, adds very
gr-atly·to the earning power of the Reserve Banks and has w3de it possible
for them to extend. to the member banks and through them to the :public the
very large credit 'a.Ccol"'T!!odations which were granted during the year 1920;the largest in the history of the System.
In this _connection, I may say that the Federal Reserve note has
proved itself to be an elastic form of currenGy, expanding and contracting
with the needs and requi.rements of the nation's business.
The daily average
of amount of Federal Reserve notes in circulation for all twelve Federal
Reserve Banks during the year 1920 was i3,146,000;000.
If the net
earnings
of ~149 ,oooi OCO are considered in relation only to the average amount of
circulation outstanding, i t will be seen that they were but 4.7'% of that
amount.
The Federal Reserve l3oard. has the power under the law to
an interest charge on that portion
·or
i~ose
the Federal Reserve note circulation
which is not cov6red, dollar for clolla.r, by gold, the rate to be charged
to be determined by the Federal Reserve Board.
It is not mandatory, but
f•_ .• ,...-•.
, I
t.
-._.
4.'.
,.
X-3156
optional with the Board whethsr or not i"., "hell
rr.e:t<.3
such a charge and
it has always been the Board's poHcy in order not to discourage the free
circulation of needed currency to refrain f;,·om i!J7POsing such a charge.
No
injustice is do11e to the government because in the final ana.lysis, tne net
earnings of the Reserve "Banks after the payment of the 6'% dividend req_uired
by law, go to the Government, for after the banks have acc1.rrnulated a surplus of
100~ of their subscribr:d capital they ·can retain ·only 10% of their net earn-
ings and must pay the other"goS'b to the Gove.mrnent a.s a franchise tax.
On
the first day of last January·, the Federal Reserve BankS paid more than
$6o,OOOJOCO into the Treasury of the United States as a franchise tax.
Had
the Federal Reserve "Board imposed an interest charge against th5 Federal
Reserve Banks on the uncovered portion of their note circulation, the net
earnings might verywell have been reduced to the extent of
50
or fD
mil-
lions, but even in such an event the Government would not have been benefited
because the amount wh·ich the banks would have had. to :pay under the inpos it ion
of such a charge wou!·i have been paid in to the Treasury month by month
instead of being paid in as a franchise tax at the end of the year-. The
Federal Reserve Banks have accumulated a.reserve for franchise tax for the
current year of nearly
$4o,ooo,ooo,
and the sum that they will pay to the
Government as a franch1s e tax at the end of the year will no doubt be larger
than the arr:ount. paid at the close of the year 1920,- not because of grsa.ter
earnings, for the earnings will be less - but because of s1r.aller
for account of surplus.
~ions
The items· I have enumerated as contributi..ng to the
earnings of the Federal Reserve Banks total $5,218,000,000, and if we con-
sider U49-,000,000 of net earnings in relation to that total, it will be
seen that they are but 2.9 per cent.
I ask you is
tnax ~g?
When
f"'-~''
Lr
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X-3156
the Federal Reserve .Act was framed care was takc'n that the stockholding
member banks should not profiteer, for the Act provides that their di vi-
dends are limited to fit no matter what the pro.fi ts of the Reserve Bank
may be.
The charge has been made, however, that the Government itself
is profiteering and the foregoing facts have been called to your attention
in order to refute that ah arge.
Before discussing present conditions, I wish to point out some high
lights in the financial history of this country as seen by the Federal
Reserve Board from the first of January, 1919 up to last Wednesday night,
May 18th.
Whon the United States entered the World War, our Government became
the principal employer of labor, the chief borrower of money, and the grsat-
est consumer of goods.
All of our activities were readjusted with a view
of furnishing the services, material, and the credits necessary for the winning of the war and our people willingly submitted to restrictions and regulations which would be plainly out of place in ordinary times of peace.
With
the signing of the Armistice on November 11, 1918, the war was ended from a
rrili tary standpoint but not in a !inane :\,al sense, because we had a.b out two
million men in France and an equal number in the training camps at home ..
f.he troops abroad had to be brought back demobilized and disbanded, and the
men permitted to return to their accustomed avocations.
The business and
industry of the country had to readjust itself ag.qin - this time to a peace
f'''~'.r
(,
·~
{_)
-6basis.
The Government had large stocks of supplies on hand which bad
to be disposed of. and also a large undetermined li3.bility which had to
be ascertained and arranged for.
So in the early months of 1919 the
Victory Loan was flo::t ted and even wi tb the proceeds of that loan in hand.
the Government still had outstanding a large
flo~ting
debt, represented
by Treasury Certif ic::ttes of Indebtedness, amounting to about $4~ 000., 01)0, -:•v0
which'amount., however, has been reduced from time to time and now stands
:~.t
a ·col siderably smaller figure.
During the year 1919 the impression prevailed that there was a
world-wide shortage of goods.
The peoplc3 of the Old \'/orld and in A.nerica
had deprived themselves during the War of most luxuries and of many of
the necessities of life_
They had subscribed heavily for b9nds and
were saving and paying for them.
Oar Government issued obligations
amounting to over twenty-five billions of dollars within a period of
eighteen months.
The normal investment power of this country was es-
timated to be about six billion; dollars a year and it had become
sary., therefore., to expand credit.
People ·v-.:ere encouraged to
nece~-
b~y
bonds.
to make notes at the banks in order to carry them" the member banks
discounting the notes with the Federal Reserve Banks, and this together
with the burden which abnormal values placed upon our credit structure,
caused great expansion of credit.
Wages advmced.
Prices ::tdvanced and \iith raw materials advanc.ing
1nd wages advancing, the cost of production was greatly increased.
But
there was such an urgent world-wide demand for goods that even in Europe war torn and debt ridden -a very active demand for American supplies of
all kind sprang up.
Our large exportations to Europe during the flrst
half of the year 1919 were financed very largely out of
th~
unused
X-3156
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balance of the $10., 0~:01 000,000 fund which Congreso authorized our
Government to lend to those n21.tions which 'NC're :~.ssociated Yvith us in tile
There remained over $2,500.0001 000 titill uneApende1 and available
war.
when the Armistice was signed .. and our large exportations to Eurore
most of the year of 1919 were paid for largely
o~t
durir~g
of funds advanced by
our own Treasury.
About the middle of September .. 1919. various influences v•ere at
work. which all combined, gave a tremendous impetus to production and to
commerce and business generally.
This impetus at first was
ju~tified;
but
the situation was soon afiected by speculation, and dangerous tendencies
developed •
. In the Fall of 1919 there was manifest a great wave of speculation.
It was not confined to any particular section, but it swept over the
country everywhere and over all countries.
People who had commodities
of all kinds to sell were in no hurry to place them on the market.
saw week by week prices rise and rise
They
a~in1
and they saw that as they
and
took this ~sa guarantee of the stability of prices, prices rose/costs
of production advanced also.
Mercrants thought it advisable to lay in
large stocks of goods in anticipation of future
requirements~
and many
of them were in no hurry to dispose of their goods at a reasonable profit 1
because it seemed that the longer they held their stocks the more valuable
they would bocome.
But there were dangers in the situation and not a f ow
were alive to those dangers.
Many, however failed to sense them.
1
were signs all over the world that a reaction was coming.
After
There
frequ~nt
warni.ng.. to which little heed was given 1 the Federal Reserve System took
action.
The discount rates of the Federal Reserve Banks which had been
advanced first to
4i'f
and
4l-%
were during the latter part of January
~fl.·.'~.--~\0
~
advanced to 67;.
·-· (_)
X-)1:56
-8-
The final advance to ]i:· did not come until abot.lt the
1st of June, 1920.
These rates \;er<J le s;:;~ however, than current
rates, and the banks having the
7~
marl~et
rate have recently reduced it, some
to 67;, and others to 61f,·.
On the 19th of September, 1919, the earning assets of the
Federal Reserve Banks amounted to about $2,350,000, 000.
By J.:lnuary 23,
1920, during a period of four months, they had increased by nearly one
billion dOllars.
Wha.t would have been the result if those who ha.d
charge of the administration of the Federal Reserve Banks had sat
supinely by and permitted this rate of expansion to continue?
If no
restraining measures had been taken1 if no warning sigruls had been
given, it is probable that this rapid and reckless pace might have
continued for perhaps two or tnree months longer,
would have been inevitable.
be done
of
whe~ a
collapse
It was highly desirable t~at nothing shoulJ
a sensational m.ture but/~l1fet unavoidable reaction should be
controlled and made as &radual and orderly as possible.
The effect of
advanced discount rates of the Federal Reserve Banks was merely to
slow down the rate of expansion.
There was no curtailment of credit
on the part of the Federal Reserve B::mks, nor w~s there any contraction
of the currency. As a matter of fact the loans and invested assets of
the Federal Reserve Banks increased from the middle of January, 19~0
until the 5th of November 1920~ a steady and gradual increase all the
way along by about $400,000,0CO~ The volume of Federal Reserve notes
in circulation increased during the same periodi from Jan~ry 16 1 1920
to December 24, 1920, from $2,80o,ooo,ooo to $3~4oo~ooo,oco, so that
during the most acute period of readjustment, when the sharpest react ions
were taking place, there was going on all the time a steady and gr:a.d,al
expansion both in Federal Reserve note issues and loans- $400,000,000
in loans and $600,000,000 in currency. A graat many people have been
deceived into thinking that the drastic reactions ;·1nich took place la.st
summer and fall resulted directly from some decree of some arbritrlry
power.
I',,~~(~
lo
-9-
I want
~--.
'1....!'
ou to kno·N tl:at the reaction which took place was
not decreed by any Govern;r,ental Board or by a:ny group of banks.
It
was decreed by the neor:le themselves, by the greatest of all forces popular sentiment.
people began to reduce the volume of their pur-
chases, becaree ·more economical and discriminating, and there resulted
a condition which is sometimes called t:re
11
buvers strike 11 •
prices began to decline about the middle of May 1920.
wtolesale
The wr.olesale
price index number on January 1, 1919 was 203 as com"T?ared wi trc the
wholesale price index number of 100 for 1913.
By the middle of May.
1920, the wholesale price index number reached 272 and stands new at
about
150.
It is interesting in this connection to note. again that
during 1920 when wholesale prices were falling tr.ere was practically
a steady increase in the volume of Federal reserve notes in circulation,
and in the loans and invested assets of the Federal Reserve
~ants.
The first manifestation of the changing condition was the break
in the silk market in Ma.rc:r 1920.
This precipitated a financial
crisis in Japan, involving the suspension of many batiks in that empire.
Next we had the break in the wool market about tre middle of May, 1920,
caused i?rimar:ily by an excessive supply of raw wool.
The War De<;lart-
ment tad large amounts of wool on hand, accumulated for war purposes
for which it had no need.
It undertock to sell at public auction in
the great wool market of Boston.
The sales were not satisfactory.
The British Government brought in wool from Australia and other
dependencies and attempted to sell it in the same way.
tions of wool were coming in from theCArgentine.
the western wool clip was ready for market.
Regular iroporta-
AbOUt the sarr.e tirLe
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X-3156
/
Meanwhile it was evident that public O'!Jinicn all over the
world had undergone a change.
\
·.
For a wti.:.e back., :peOiJle did not see:m
to care 't)articula;rly what prices they pai,l. Tre r;::;.in ia.et:..
WE.S
to get
deliveries, and ·you will remerr:ber we had what is l:novvn as a sellers•
It was experienced in all business.
market.
Purchasers !:ad an id.ea
that ttere was a real shortage of almost everything and in some cases
there were actual
~d sho~tage
we
shcr~ages.
But after all this question of surplus
is merely a relative one.
may learn what the supply of a comr.~..odi t.J· is; t!:.at can be ascer-
tained or estimated with approxirr.ate accuracy, but no ma.h can state in
advance just what the demand for consll:nption is going to be,. oecause
that is a matter which depends largely upon sentiment.
It is almost
impossible to say what things and how n,uch ::oeo'l?le are going to require
or what they need, for while
actual human needs are very siiir?le. there
are a great ma:ny things people rave become accustomed to which they
regard as absolutely necessary.
Many a
man, I presun:e, has rLOre
clot't ing
than he really needs, and the depression in the textile trade was due
to the fact that :people realized tr..at they could do without new clothes
and that in large n:easure brou.&}lt about the demoralization of tl:e wool
market.
The retailers found that the;-/ had 1 i ttle or no demand for
woolen goods, and the tailors were not doing the usual business.
Tr"ey
did not order goods from the mills or they cancelled orders already·
placed.
The mills found, in the new circumstances. t·tat trev ':lad ax.t.9le
su:pplies of raw wool and
t:~.e
wool rr.ercr.ants called in their buyeTs from
the '.'Test and the price of wool droDT.Jed from about ?2 cents a pound do•vn
to 15 or 20 cents.
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X-3156
Two or three months later the same experience >vas undergone in
the cotton market.
Of all Amarican products, cotton is probably the one
most dependent upon foreign rns.rkets and is most quickly affected by
conditions abroad.
People who ••ere engaged in the sugar trade iuagined.
that there was a great shortage in sugar.
Sky-rocketed up to
You will remember ho>; sue::1.r
25 or 26 cents a pound. There
seemed to be a shortage
of sugar, but there was much held off the market in order to be sold out
gradually at high prices, and then a situation developed) which seems
perfectly natural now v'Jhen we look backv;ard.
In view of the dep recia-
tion of foreign exchange, all other m.ticns vihich produced sugar,
attracted by the high price at which sugar could be sold in cur market,·
shipped sugar here and a great n:any nations which were not producers
of sugar but merely consumers 1 shipped sugar to us in order to get
dollar exchange - - in other words 1 they were perfectly ·willing to deprive themselves of sug3.r in order to get things they needed or desired
Consequently along in September there was a collapse in the sular
more.
market.
During all this time the
le~l
Feder~l
Reserve Blnks maintained their
reserves but they did it by means of inter-bank rediscounting.
There were 8 federal Reserve Barijcs at one time which were borro•;ing
$267 1 000.,000
from four Federal Reserve BJ.nks.
We had x.o financb.l p.::tnic,
the reserves of the Federal Reserve Banks were maintained in accordance
with the law 1 and there never was a time i.hen the Federal Ree.erve note
waz not redeem:lble in gold as required by law.
However1 since the first of January of thic year there has been
::~.
gradual change for the better in the position of the Federal
System.
Re~orve
The loans and earning assets of the 12 Federal Reserve Banks
-12X-3156
last l.ednesday night were
$2~314 1
point on October 15, 1920 of
$1~
000., 000~ a decline from the hibh
108 1 OCO, 000 1 Federal Reserve no~es
in circulation were $2,767,000, GOO, a decline;: since Christmas of
$637,000,000, total Cash f~Gerves have increased from~2 1 249 1 CCJ01 CCO
on December 30 to $2,549, ooo. OuO.
l'he Federal Reserve Banks are
strongj they hold today a gold reserve larger than that ever held
by any central banking institution in any country, an amount
eq~l
to more than one-fourth the entire known gold supply of the world.
The invested assets and loans of the Federal Reserve Banks
.have now declined to a point where they stood in September, 1::,19-
They
~re
about $300,000,000 less than their cash reservesi and
Federal Reserve notes outstanding have declined to an amount only
about $200~ 0001 000 greater than the total cash reserves.
Now-~ ··l'htm
any bank has more cash on hand than it has loans, it is in a pretty
strong position.
The Federal Reserve Banks 1 which are the ultimate fim.ncial
bulwark of all member ba rk:s and through them of the public are
nov1 in
a position better than ever before to extend to all legitimate businesb
the assistance needed and in adJition to having the ability 1 have the
disposition to do so.
There are no•·i no credit restrictions 1ilatev0r.
We must meet changed conditions.
VJc have a strong reserve.
lie have
had eJCperience and business is readjusting itself to the new levels.
There has been no
Federal Reserve System.
ch~ge
in principle in the policy of
th~
There nas n3ver been any change in the underlf•
ing principles of the Federal Reserve Syste,D and I hope there never will
be~
becausa the broad policies of the Federal Reserve Syste;n are based
-13upon the fundamental principles of
banking.
X-3156
~ound
finance
and
legitim~te
iTnile there has b_een no ch:1.uge in the principles of the
Federal Reserve System, varying conditions from time to time, 'however,
necessarily bring about changes in me3.sures and methods of applying
policies.
One thing that is holding back a revival of busir.es6 is the
disproportion and lack of uniformity in the readjustment process Y.hi.ch
is taking place.
for
instance~
There are some things, certain basic raw materials
prices for •• hich are very lo·,,-, belo•v the pre-war levels
and below cost of production, but there are other element::; ·.vhich
figure in production and distribution which are still high 1 which have
not been readjusted, so that somewhere in the process of distribution
between the primary producer and the ultimate consumer) there is a
hold-back.
The ultimate consumer is no·c getting prices in pror-orticr.
to what the primary producer is paid. One problem of the business
and industri~l world today is to iron out all these inconsistencies
and let the proper relationship betvveen one class of goods and anotner
class of goods and between goods-~nd services be restored.
It seems to me that this is one of the moct important of our
present domestic economic problems.
I take it that one problem of any
down
manufacturer or producer is to get his costs/in order
th~t
he .nay be
able to offer his products at fi~ures attractive to buyers, for the
sellers' market has now been replaced by the buyers' market.
The
farmer is in nard lines, and the farmer, as we knoi~, is a mcst important
element.
'
...
He constitutes a large perc10ntag_e of our population.
He ~s
the principal producer of the necessities Gf life, upon which the
industrial world depends for susteranca, and he is also the principal
..
.
r
eonsvmer of manufactured goods of every kind.
B04
Whenever any circum-
•tanees arise which impair tbe purchasing power of the farmer, the efis
feet/felt in eammereial and industrial centers everywhere.
·"
The reduction of over a billion dollars during the last four or
.
(
five months in loans and investments of the Federal Reserve
ed from liquidation
Ba~
has result-
tn the larger cities, in the financial centers and in the
manufacturing centers.
In no
a~recia.ble
in the agricultural dis'tdets.
degree has liq.uida.tion taken plaee
The Federal Reserve .Act :provides that all
paper discounted 'ri. th the Federal Reserve !anks must have a ma.turi ty af not
longer than 90 days, except agricultural paper or paper based on livestock.
which may have a reaturity as long as six months. 'l'he J'ederal Reserve :Banks
were carr,ving the first of
Mar of
8lld livestock paper, of maturities
<.
this year
$230,ooo.ooo
fr~m ~ree
of agricultural
to six 'YOnths.
On the first
of May~· '1920, they were careying *10~,ooo,oco of such paper and on the first ·
of May. 1919 they were carrying cnly
$66~oco,OOOw
Tbe Federal Reserve Banks have done a great deal to
sustain our basic
imustry Ul'On which so many other industries depend. !hrough rediScounts for
me~ber
banks they extended credits to farmers and livestock men during the
year 1920 aggregating three times the amount extended in
some people have that
i.a entirely erroneous.
the
19~9.
The idea. that
J'ederal Reserve Banks have been pressing the farmer
The Federal Reserve System is not operated with the
view of coercing, pressil'ls or oppressing anybody.
great safety valve of business.
It is designed to be the
It is the fil'lal reservoir of credit to be
resorted to in time of need and as such must be neither clogged nor del'leted.
The System has stood tbe tests of war and of the readjw;tment period
following lmd it finds itself now in a stronger position than it bas occu:pied
sinee the flotation of the Third Libert·y Loan.
.
"
,....
·
'f
..
-15-
X- 3156
'
The cash reserves of the twelve Federal Reserve :Banks last Wednesday
night, 'May lSth, were $2,5l~9 ,000,000 as against <1;2 ,080,.000,000 a year ago.
There is nothing as far as the banking position of the countr,r is concerned,
as reflected by the Federal Reserve Bank statements that cau.ses any ott.er
feeling than one of confidence.
I stand before you. today as a conservative ~d constructive optimist ..
The pessimist is with u.s and he has his uses, but the main fault I have to
find with the pessimist is that he operates at the wrong tirr.e.
The present
is no time for the pessimist,- .the time for him to have gotten in his work
was in the Fall of 1919.
I look for better conditions in the not distant futu.re~
an evsning
ei~her
up :process to go throu.gh with.
We have still
Things that are teo low rrus t
rise to the leVeil of those things that are higher, or those tl:ings
that are too high
~ust
come down to a lower level, or perhaps there will
be an average and we •till r: ach some l""vel half way betvle3n.
I think that we have passed through the most trying and dangerous
part of the readjustment period.
If
w~
can all get together and aid
the orderly processes of production and distribution and get the public out of the idea that things will go lower
~
lower indefinitely 1
than we will get same stability into the situation.
great deal of buying power left a.nd buying power
When one
i~ortant
industry resumes, others
The public has a
bege~e
buying power.
aut~tieally
revive.
In the changed conditions resulting from the wa.r we occupy a. new
~elationship
to the world.
We are no longer a debtor nation as we were in
1914 when we owed the rest of the world abov.t $4, 000., 000, 000..
world 1 s great creditor nation today.
The world owes us
We are the
$10,0001 000~000
on
account of advances made by our Government and owes us perhaps two billion
...
.
-16-
(it is impossible to ascertain th·· exact arr,ount) on private ?,ccount.
It is certain, however, that the lkite:i Stet·2s today is a grrat
creditor nation.
In order to maintei.n our rate of production, we must push
We produce more cotton, more foodstuffs, more of a grea.t
our foreign trade.
many things than we need for our own use.
with the uvorld.
We must reach out and do business
We must buy things from other nations which they can :produce
better and more cheaply then "ITe can, and exchange ccm1T'odities with them.
If
we dete!"!Tine to do business with end for ourselves alone, it seems to me ·in-
evi table that we must then reduce our production to meet merely Jlrr.erican noquireroents,
I know of no royal road back to business revival.
will test our :patience and
observe these sound
ener~.
~rinciples
but the process ·will be
wtich have stood. tb-:;
give and ta'k.o. live and let liv(}; giv() g,ood
W6 rec8iv~
and be content with moderate
L@t us
be~
morking
v~luG
t~sts
or
idt~as
to normal
exp-;;dited if ·Ne
of the agr::s - !.':'1:
s0n~~:G
fer -¥,hat
profits~
sane and reasonable - let us cast aside those
and got rich quick
ba.c~
spaculat.~'lJ
which w0re so prevalent eighteen months ago and
get down to hard work and solid business - th:m in dUEl
cours~
wo shall
return to more ordsrly and noi"I!JCtl conditions, and can d-3Volop not
3
fal#e and hectic prosperity such "'s was recontly exporiencod, but a
soundsr and more 0nduring era of good times than
W13-
havo evor had
08 tor;>.
'li"
@FedFRASER