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aEV.ARXS OF H., ·P,. WI LLZS.
Janu&f7 16, 1916.
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Jlr. Cha.il"'::lan anJ. Gentlesrent
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r.:•nt
tour SecreUI-7 in lnvf_t,ing. Ul8 to. be
tb.ia
rr.cr!Wlg au.:.geated that ~ a;peat to JOO. 1p l'a.oo&al
Prtblea•.. 1 8\ippote 'QJa.t. lae ,..._, 'Uae~~o,a. ~
t)J.la vra.J out oC tbe !a:ogeaeH ol bia hC?JAtalitJ, f.n
&Dt••
~t in a6 'broad a. U.e1cl almO.t
oOLilll. U.u a:A
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agreeable Oon:le'r. l knOW' that, he clicl aot aspect<zr.e to tq
oov,er aU .1.\~.~anoW pJ"Oblerr.a~
even aU. tbat ..,.. pl'e. .•
ing ·tot at,ention at th-e present tiu. lad.he cloa» eo the
dun.ticm of thla Ccmve11t1.cm ww14 b&ve .to be coaawen.b~
extended. I euppoae that the id.eaa' % can to. 'beet &dvutage
present to you ~~ ~torn1ng a.re those whioh relaw. to the
fiu.no:i.al. · probleu bJ wbl¢b . tbe bue:l.ru~·· ·np WJr.eelt is cOD•
':roated
th1a-panicular a011:ent • tbat .ia;.to &&J, thoe
eapacial prol>leq arowuc -· of wr c~.w ~d ore41t
poaitioa 'llhioh :&re I'LO.;t ·preatirsg ~t .\M.I ,\~•
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·Jt.uth Of ~ueatioatot bcm4 .issue, J,-.u#
necessary ea~ingt. &ad taaatloa, and. he wo..Jlcl 'be. a b44· ...
. Who ~hcul" entieavor to· &0.4.. u,thing to y9U.r oS.»Jonra"• •
these tOpics. ftlore ia, bo1re..er~ a U.e~. 'Oi ~~t 1D-~if
~oo~otion that•has·bad oamp&r.&tive1J lit~e atte~~ioa ~the
br.laineaa m~.o• s ~ direct aacl eepeola.l re~t.~~~ •0'\'18.f
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hetra;~d
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Cl-.oing~
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No point has been more clear11 broupt. ca&t. iD the cOtArae
the dieQWieion of the war~ thia,. ... ~hat...,.,, \be Gofe~
'"u'Qt,. indeacl aU governzra1te, needs ia .no\ m~~atr.":lut 18 au1 .
goods and aetvlc:ee. !he 'bUaiD!I•• rr.ari, lJ.D a~q o\'ts&r~ &ocxl
citiaen. lharea in the t,a.e.k 'Of. fUmiah~ a». 10', 11YUC "'
h~el~ and hi a c:hilcirea to \l3e ee rvloe ot Ule· .Sa\et: • at
h~,. at the asat ot GoYe,..at,or ·in 'the.. fS.l.4. MOPrt4DI
to eepeoW aptitude. JU.t du'f doea n~ diU•r, ~ ..,_,
of &nJ 9'\her good citiaen. · lt.ie b lt\lppltJJ.o&~aMq" ...,._
se"1,ce-e \laat. hie peO\&Uar _., becOP• 4~apl,ou..- .,..
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par.en~. :We ~~ adm$t tlaa1 ~& eo0ftoxr4.oal. ~· .QI 0\WlJSMCl. ·
and our rt•~•• U. ~. 1• ••••at~ to ~J auoo_. f.a
the
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While we fteely -.cln41i ihie. -... Nl .abata• FO•
is true llere,.
in so nany other fieUa, h.t. a ·
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little knowledge is a dangercwt thing. llany rr.isintorpret
the idea of .eoonOUlJ and pettba,. clo as u.ucb bann in their
rr.isinterpretation aa those who reject i~. It ia the business
uan's duty of leaderehip an.i insight in cozmeotion with the
production and co~tion of gooa. ,that• emooUee his particular responai~ilitj at thie ttaa.
The wsiness zran is either a. pro.iuoer., a. listrib\ltor or
.a retailer, and in ::each of these ca.pa.citj,ea he ha.a Ilia OllfD .
individual tunc~ion to prefora.~ .Ae .uai.Nfacturer~ it is incim..bent upon him to ayoid attea.p:tUI · to encourage or even to
u.aintain those f oru of OOUf.\ll.ition· that at'S ob'Yiwaly waste•
f14 ud. ·have a. ten.ienoy t9 J.eetroy irateriale witbO\lt any· cor. responding return. In ye~~r own trad.o., 1011 have not been tree
tnm fault·in this regar4 for . . . ,.,.. pa.at., aDd to the
ordinaf1 ,~, .,. AOUwr..l'. it WOQ1,4 ae1m tbllt the timot.111l
of resu:.\ctiilg the dU t"srent iJpel of boC)ts ~.i .ahia• avail•
able on the :aarkst- to those ~\ are of ear. aet'fi~ a.ncl fall
witJWl the liml1• of· tllt.ti'Aib aense, 1. a.n important one. lve't7
,._atactunr.A~tt., I think, .reoognias '\he J.ut:r of a.ttempti:Ag
to ;,aU.ae Ilia ~Oduetion .to aatiaul. line• .in ~1Gb pablio
oltm¥d .,.. aqus•tioD&blJ .J.egitk.ate a.ncl,. ao !ar tU he reu-. a~r' -., t.Q cuna.u .tbe. pndUOtioa of thoee aniolse wlaioh
are ol1V~wal1 ef a .PV011 lUW'iowa ohara.oter ucl do not
~&!1 101 weu-sranecl ._.. !hie rsspouibilii7 naae ·
tbr'ou.;b a:U. of the -.ra.aea Yfhioh oater· to cUreot J)eraou-1 c.....
INit.J'U•• . too~ atre•• oaa· uarcel7 be laid. u,p• 'tbi•.. reaponaib1lit1 on the par.t. of tbe naDufacturer in abai1n& his 100~a
so ae to C!Anail ~iou aDd wuteful uea1 while at. t.he ·AD'S ti.rr.e
fullT WPP4fin& the nesde of tbe CCIIltUnitJ for aowid. and. staple
~icle•. · ·Jt is perhaps the moat unf ortUD&te eocmcamic ,pl'ase of
the war tba.t at a t.ilr.e when baaio uceasit1ea are eubleot to
gnat 1hortap there is of tea a aups~bunda.nce of .~r~n,.
frecp&entlJ at ,pries• lOiter thaD ordinary. BeoeHP7 ~llfiDNi'W.ea
n~ 1Direquelltl7 rise .£1& RriOo, while lU&Viea 4e~. }~J3e
_abnol'ai!G red.iatrib\&UOD of wealth thtON)l ~·-.of
wages and. through the eaf'fti.q .of UDe&!)8oted. proU.ta f11tl~:·
lRVing 10Ner Gilt of nonral obaDM1a 1D whi~ it ..,.. bNa :.
.exened 111;) raew anl unespeot~ct l~a.. Fonuaa.te&r ~~rera
c:an., U they wil1 1 · oontrol ~ of the vaga.rlet :Gt 'cion~
which are likely to result lnm t.hie state ot a.t.taira, -.a 14
tbs7 an cae ~1 can· ~""eot the comriulu,•a intereet. fl'to
f\l.UJ by w~1Ug tbe1r .qu~pat to lagitilta.~ or aOI'U.\ '"•••
•*t~sa 1 1n tl\8-•az..e •1 ~ retailer, vmots ue\liU eU9" !a
to iaoreat~ C~l'tion b7 tven le · ttinate •viae aaa eva
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artifice~ finds hiaau,· like xr.ost. other peraou, in a. •
position where he is cal.lelu~ t.o glva Mp hie ordi~I'J'
lines of t.hc:ugh1; ani to aaabaU~ate lltW ODes. flle CQIJIIW\1ty
asks hixr. not. to enccura.ge wasteful or ·lwmtiGN c.aelJII)pticm
either thrrugh tbe Q.rl')'illg tf \md1l11 varied tt.octa 01' th.rQlgb
extensive a4Ve1'tiaiflg, 01" thi"Gtlgh the e:&teUiOO Of Wl8GW1d Qredit.
It a.ab hixt tt a.p~ a tat~ zr.ethod of CQflcl\lttiae \'Maines• apd
to aubat~:tute for eoaoepUODI JDrelr 1Bfliv14ual, ;penaoBal aa4
Jr~.,.,~. tba:~ ·ot eertioe to the OGilaudt,J. He.-. beOCIIte ·ee ot
the eha.rmel.• Of diatnbu'ioa'bf wbich the pt.\blio-ie ·to be 8GpiUe4
and auata.bed, &Ad ·b ,perfo.ra4ng this luct~OD·hia earlier ~d
ae~fub stan:lpomta of ccmd111t have been ••t aaiie. It &r.&7 ~.
ta·~ ca.see it ws.u be, ·tru., ~t .iue to the ehaage4.o~1ti~
~~ trade .and tbe·Y. .UJ··bo.....,..; ••o,.. oC cl.-..l his profits will
DOt be ).eaa Oil tbe MW buil '~ UpGI&. the olt, · but tbiS) 10· 'aJU'
ouf, is ODJ.y·aa ~·•• fot·tl\e ••••i.tU• 0£ llie eenolc»
be.~ bec<m.e ·1\lpe&"iOI"· to tl:loaa ot bie ,penOD&l ·~CGU4i
fhi,a. 18 a· daf o!. cov•nur.ental J.Dtederanoe .·~. all·line• ol
\.-:de. ··b-.,p*-'Y ··le<lat£-oa bat acme ,te ........... of . ··leqtl'MI
abr•d, ·aa.i thouch ~o · taave not. ful)J ao ..itecl it. ~·~hit •~try ..
wt baYs tatea ac.e·· deticle4 ate~ ill tba.t U·rectJ,aa. · · GoYel'lli:$1lt · . ·
-.relll.P haa ·ll.re&q. bee~ apJ!Ued
lbet ·aaw ·ie proi01Je4 ·
£a. otben. fet tbere· are ,_.,_.,. • • btll.-e tbat it ·~ en•
'\$r8,1· .Poi•ibl.e··tor· bua&ae18·aa of a a1f'Uilet tr&Aa··o.- p,-ofeteioo
eo;~~. eona.•crt 'thelr:Miuaeea with a.a eJe single to the p~&1G.._
weltan that they·-.u •bWn rel'llt• n,per1or to ti... to be Md·
titrO\lgh the iate ...eaUOD. of CMtticler•• tbls. Ulld&ubteQ.y, ie mon
la.rgeli tJ'\le·of th:a.elbet ot l:Ms~Dt•• wbich nave to ·4• Wi~· the.
aupp1Jing ot. pare~ oonwm,pt'on tbao 1D Oil'ae", &Ai it is, ther•fore, true CJt JW. "(BlAt iD a,pJlJSDs; &faJ &er&el'al. etanPrdt ·of regu•
t.at'oa;·or· ccmt.rol to the iireot1on of b\uine••• noth1za& u 10 .· .
pOw-cniui ani lnflueatial ... lewld arl;i wib atanU.rd•· of 'ia4i'f'.i.~
i"efpDUibUi.tJ~· aD4 ireU.t.. !his :La ttu• at all tJ.Jr.O•• ·bill~ i\ ·1.1 ·
J.oObl.J' ~nae a\ lnOIIill~ like the pre teAt. We eeek ~e. all w.za&t ··
elae· ln' ~irr.ea ot peaO.·; ·bJ ~ uae of .r ••J~eU:tl•e\-.Piaeq ; ·
1<» lni.ns·.abOtrli the. &pponloauot o& aoOcll, •
bu$.1· Of WU. .,
a~_pt:lo;n; to: thoae tQmniDitiee or 1ncU.v1..1lw.le who an e11titlfii\
._o_ tbom1 · a:li vvbo., ~ &CotJ)t111G a.aol ccm8\AD4Dg1 wC.U 1noidentall7 .. .
~Jtodv.c:e the zr.oaae· of p;LyiDg for what. ther bave tlma bee•· allft•l. .. .
ll'cai ·the ge'heral rioa·.
T~ it ie that Va.ga.riee ot •G~r~peti.ti• ·
b&~e ~ tt.u:i• paet. 1ndet4 akoai ioattaatt.l.J, 'b~ a~- d1a•
tur'bo~ cofliiti,~ o( . ._.. . . wbiJil wOI.aJ:l Dot ••• · · levelo»o4
ha.i there'··baen ~ue regard. tot the well&l"e tl tbe 4•ms•n~~'Y· a¢ ttae
~ ..oa;de1" etbitt Qf · ·""''n... ~ ........ 0~ tbe ~iA of ·t.~ ~t ha.Ye
in..-,
•be
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been the result of unsouni crelit wi~ely exten~e~ and as the
result of c~petition betweea sellers of goods which leal them1
in thoi·r anxiety for prof iS., to foster undue expansion of denand
ana cons~ption~ Such ~iaturbances of nor.mal oonditions are always to be deplored, but at the present tirr.e they are worthJ of
the most seri~s reproba'i~. ~ch as we are in the habit of
insisting upon econ~y in the consuu~tion of goo~s, we have had
comparatively little to~ aar with reference to the parallel economr
in ths use· ot credit aa extended both by oo~rcial houses and
_banks. Yet it ia this very eoon~y of credit that lies at tbe .
root ol all tne ecoc011:1y in goode. The business Q.D who estab•
lishea a careful cbeot up~ the credit o~ his ouat~rs and who
in every transaction is gOYerDOd bJ aoullQ sian~48 ill h.S.a
estinate ot the ~t of oredit to be exten4ed 1a aot QD17 pro~
te Qting hin.sel~ aga.in•t the t~e wbe~ ohangeli #oadi:tiou w.t.ll
supervene, but is protecti~ the co~it7 a~~ oxtr&vagaace
on the part of ind.ic~dUals iL8 well a.s a.ga.inet ~t f.&pa.ns'OD of
liability which in the 1-.et anaJ.ysieis l~elr to lead to U.aeter.
The den&l&d of tho ~C~Pnt is v.ndw.'bte~J . ftr ~. ut~t watcnfulnees on the part of
~~ 'bo lle ~f•oturel', diatd but or,
or retailer. wltb a vi~w to a.se~ng bimaelf that eYery cn·edit extepded is as eea.r~r l~~uid ae ~ watchful~•• ·&ad 'udgu;ent ca.n
rr.a.ke it~ Carr.peti~.iv~ c;on;U,iou in t~s ,paa\ lJt,ve J,ecl to the
extena~on of ~oag ~redi"• aa4 the abuae of seJ.Uzag teru • .Advance
datinga, ~proper and 'Ul\Oanaecl tisc~ta 1 and ~ ~lt4tude of ether
~oncessions xr:ade for the purpQite of ena~ing ~ ,,reta.~er, ~d
through h~ the conswr.er, to absQf'b goods ~t ~b.ey ahould ~ver
have tak,en, have been the oriler of the ~Ut.y. tbo.e· of ua who still '
believe tn the old econOIIlio ~octriDe of "la1Ne• ·fa.LI:e • believe
that thase wan.leriogs fr- the path SOWlil ·J~M evntuall7
bring their-~ retributi<m and so corr'e9t ~o,vot, 1J'lou.gb often,
it is tNe, at ·a heavy cost to the in~oc~nt u _,.,. at to tlle &Uilty.
The present le no tin;e 1 howevel", to penolt 1 expel"iuntat~on. Every
capable establishrr.ent kn~ a.pprox11:tate~1 the 11114"• of the aafe
and. unquestioud credit of :l.ts ouatOJlJOrs -.nd ~tbq~,ald restrict takings
of goods to the limit
ea~b3.i.B•4· it B!tou.ld. conqede no :levi&...
tion frQm the ~ath tbua narted.
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1 know that there are· ~7 wno reje9t t~il OGI'WI8l beoauu
of the sacrUice it enta.il.s. . There
a~ who ¥.tl,-d~apoeed to
seek ~ 1n.l'fOW~tent ~ the ol:leT s:r.eiho!e ~.fl.!. hO,d.\1 1IJ urelr oballg~
~ t-~l" ,...
~~1 •••m to r.a~OI& ~' !Wl·a}.t.,..~ol). of &J:pou~
~~qe w~~; ee~ tbe ·~ · ~~oe• u a ~S~. i,~ ~-aa, c•d~t. ~
t~~ re(j.'l.,\;re~~~.. of war ti~n.c:ing ab*' ~o a l.a.rg~r sbaro ot ~be
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capital available S.n the financial uarket, there is a iis•
position w the pa.i-\ of buyers to put their pa,Per into a fonn
available lor ~isc~nt at ~deral aeserre Baats in orde~ tha~
it ri.aJ e;ain ~ wider field ot sa.le, a.nJ. nay be .enable4 to take
adva.ntaa• of the lowes~ possible rate offered ~t aQJ _tine. Tbis
!n ~tself 18 a. aoocl developat; ;ye-t ,. ie n.,ost .....irable t~t
in thie process of reahaJ4,1tg the c~ercial Ra.per of the OOYil~I'J
there should be develoP"d a!11f kih:f of pape~ te~ioally elip~e
for liisc~nt but in fact not 1n conf onrl t7 )"11iA. 'til* spi·rl~ an4
purpose of the Fe.lera.l ileeene Aot a.nil of sound baaki~g princ~plef,
I naJ qntioa as an ezan.ple ·of what I zr.eaA• ·the Jlan reoeaUJ 10t
folwa.rd for finu.clng corporat19DIJ tor loaa& ,PtrioU br UlNDI·'~f a.
aeries 9f notea issued ·under an agreeu't aM .Provt41.Dg for IrSrJ'11
renewals. In the same way there has 'bee~ in ICIIIIaJI~n, a.
groath of so-called t&:a.de acceptances 'represent~ ,;.oli or al~
accounts. !hey are., o£ course, no b8tter t~ tbe •r.di'O Wlder..
lyiug the~., artd the Ir~Ste fact that they have 'beeQ. Jl'lt. into fom ,
· whicl'l is int.ende,cl, to suggest l1qu1d1t7 Ul no •1 a4ten their
Qharacter or the danger Whiob a.dher~s ~. t~ ~~illg ol .no.~t
on th.ie basi8. 'lb.,_e years aso, 1i:a' i\a lira~ ae~iea of· Oirtalran,
the Federal .Rosene Doar4 ;!:a14 dcwn ~e p•I'BJ. ',prbci;lea wh!oll
el:l~ld govafQ the exteuion of ban-~ns cr.e41\ ~ ~- t oUowtq
wor4.a;
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re 'luirea nut onlr the bills held. bJ the Fed.•
etal Reserve tanka ahoulcl be of ehQ.I"t and weU. diayi'bu'tecl
Iiatu~itiea,. ,~ i.n addition, ahOulcl be of s.!P obu'aot.r that it
t.a reaacma.bl7 oertaJ.n tb~t the)' oabbt co).+aotej wMO t.bef uat~1'e.
T~y ough\ to be easen\~J •sell.,.liqulat~" or# in other •
worO.s, eb~d, represent in every caae acm~"cU.et.j.J,t ate) Of etage
in the proa.uotive or cU.atlib\ltive ~proc.aa ·tiP ~t .JJOgnaei• ol
goods fr~ producer to co~'·
Tbe ~o~ nearly tbeae ateps
apprOach. the tina.l cona....,r tbe · azralt~ \fill be the ameunt j.%1,.
volved. ,in each tn..neao•Utm a.a )·represented bJ the bill. ani ·tile
~rt autQDiatica.lly aeli•UOiui4ating wfi~ be ita o~oter.
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"J)Q~bie Ja&Zr¥' Jia.PfJr drawn on a. puroba.aer a.ga.11urt an
aotwal sale of goods a.fforda, sroa tbe eoo~~o iOint ol vi~,
lll'in:a Jaoie evi4ence of tile oha.mot,.- ot . the 1Plli••·U011 IP•·
wh~cb it a.ro••· $.1Dgle . . p&Jl&J'. ilCH1.8Q f~tlJ \lattl. J.a.,._.
U~te4.. State••
.f'epl'eeent the fatt.i kind ~', 'tf¥lllt'tJ.._ ,...
t)ioae ~ar.\ni -~o ~· ~·~no!\ a8 # ~aHeVer ~~• ·~• Dlll£8
paper d.~f :nqt ahr::(lt -~ ~ite ~ace tlJe ~ote,l" o.f
..,...,ctiOJ)
ouf' qf whi..P it aroa• ~ an i~ t~Etd wtJa.lt~•. <~d ·~~· ~·.of· pa,per ~
i.'t is ~nCW,L~~t u,p• ~oh Fe\lera'- Rase~., ~~k tQ ~si&t. t~ t~ · ~
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economic nee.l, refuae it. It is rmch to 'be 4wbt.e4 wa.~r.
be obtairlecl thl'oqb t.be 11Dlte4 action o'
· l)a.nten. Self•S.ntenet and dUferenoe ot oJiDioa will.- 1a tile
banking field as in· a.U·,othen, ,DJ.11tate ap!Dtt •ch bamCDJ
an~ wntr of view. , leither is it to be espectecl tllat a ,perfect
ayatem of oontrol can be evolved 'by the GoYel"DDI'.8M or 'by asq
Govel"rrrlBntal 'bocl7• SV.ch ,au,pe.fri1i011 ·and inte"eniS.on 1e al•r•
itr.pe rfect and incomplete. It rrA7 nccee4 in aanbg out broa4
lines of procedure but it ONl ael4GIIl if ever do n.on than tb1s.
The question will alwa.71 recur, whether thoee th1Jaga wbio1a are
. neceaaaZ')' to one S.ncliv14ual or gi'O\Q of intiv14uale a7 Dot 'be
luxuries to anotber6 and whether the 4rawi.Dg ol a pu1'8l7 arUficial
line between olaaaee or graciea of Ull a4ght aot do zr..ore harm tban
good; tr.igbt not ao 4iacCIDIIlocle large cl&tne 1a taa. cOJ:rmam;ty aa.
to reduce their prodQctive ,..ar, and ao rea&er tbem leas efflcieat.
What is certa1a17 leu1'1e i l that evel'f 11ar*er iD ~b& eredita
should confine bia adva.Doel to thoae itellil of Jl&ll81' whioh an W'l•
mistakablr the product· of live comutrcial opara.tiou. We taow tbat
~kere, like others, in the wor4a of the ~~ poet. often •eee
the better wa.r but follow the woraa•. lverr 'ba:Aker, ae a reat.alt
of the atre8a of buailleu, 11 14ke17 to have a oertaiD el__, of
paper in his portfolio wbioh repreaelltt renewal•, aud 18 to bt
regarded rather aa inveatn:ent of .capital tban at adV&DCe of comlf<Grcia.l acoomo4at1on. It 1a thit eleuat of bank aeset.e wboee
el,ixtiraation 1a now earnestlr oa.Utcl for 'by the requi~uata of
war. So great are our natS.cmal needs, eo rela.tivelJ little it
tbe volun:.e of bank aCOQir.Ocia.tioa left aver after these natt.ODal
needs have bee~ ta.tiaf1e41 tb&t it 11 oaaential that tbe c~
~rcw paper of the coam~ eball lie, tall•ivolr a.a pOiti._,
of a liq.uicl, \short tenn, earlt aaturug n.rietJ wbiob eDIUI"ee
eettlerr.ent upon the .ius cia.tea. If ~ten a.D4 ~beet aa will
coopera'k in reatriotillg tlaaii" gn.me aad their dezraau 101"
a.ccou.04at1on to tranaactiODS of tbie d~toript1on tlae7 w1U
eatabliah the beat of all eyateu. of ,prioritl • tAe ~~orit7 w~ch
d.ependa upon liquidi.tr an~ pro.i\lctift pOMe~, and wbi.ob ... _,...
li~uida.tion at the preaor~be4 tina beoaQae of the faot ~t.pro.
duction baa taken pla.oe a.a a re~ult of the credit esteU&d.
a.rrr wch reeult can
•
Does this reorganisation of tbia credit eyttem involve aar
aerioua hardehi,p to the • • • • rran? I O&D aee tbat it 'IIAJ do
eo in not a few oaaee 1 yet, u I haYe Riel, 1t u the CJO\d'lt
indicated bJ pUbllo. a~1r1t. lot cm~.r· 11 ~~~ toN,, bu~ U u
a.J.,ao the course 4ea:a.n4e4 b7 a wiae coDaideratt.oa of prt.•ate welfare.
We cannot expec:t the present la'bulqualJ higb prt.oee to continuo
inie finitely. Alrea.iy the ~reau of t.&bor lbon an t.ncreaeo of
29
X-647
- as ozoo 50fo J.uring tbe J!llart since the opening of the European War •
OQr net gold. gains tince t:R.e ~ginning of the waJ' have been more
than $1 1 000,iJJJ,OOO; our increase of paper currencr hal been aoue
50% of ita f orn:.er &JLoun~. A like increase in our bank cle,Poa~te
or creJ.it curren07 baa aleo taken ,Place. There -are BODle rea.aonera
who regard these cban~es a.a the oauae ot tbe cu.rnut high prices ..
Othent think of the high prices as the result of lhortage <4 com•
r.;od1tiea accompa!Ued by unproductive oonaurt.pt,cm. I wS.U not
atte~pt to enter into this controversy but will confine mraelf to
sUggesting tha.t whichever sehoul of thought TIAJ prevail the 0\ltca..e
will in either caee be the sa.xr.e so tar aa the \xlailseas Dall is coDearned.. Evidently there mst be a shri11ka.ge of, prioea either through
the natural. redistribution of gold which will foll• the cloee of the
war or through the restoration of the au.e uonxal balanoe between consurr.pti on and P'J"Oduction. When that tin:e cons a tho8e wsioeae n:en \\h o
fini the~selves with exten~ed lines of oredit or with dead aseets
re,Prasente.:l by pa_pe.r whicb 1 while technicall7 lioiuid, is subject to
renewal or ettensiun in one fo~ or another, will hav& tv face tho
tazrJ.l~a.r con.litivna which gt-wr out of falling price levels and reversal
<Jf the currents· of Jema11d• It Will be a. tilr.e when thuae who lave set
their houses in o~~er will have reaaon 'o rejoice ia their foresightJ
f vr when that tiu.e cw.es nu power in tbe econou.lo world 11Aill b& al>le
to save th~n.. The world. will lace a. short supplf ol oa,piW and goo4s.,
an~ coneequentl7 banking eredit w1th interest ratea oor.respQQdin~T
aUeOted. He wut be a Wiae rra:a who is willibg to aaoritioe sar.e
present prot·it tor hu aw11 future welfare, if not fv·r that \I#, the c~
nunitfJ 'by keepin€; hb cBdits Withi.n the lWta of ,iN.iente and. Wi14om.
fbe business 1taZl 's t1nancUJ. probleiilS are tAus nvw, a.s al.wa7e,
n;.;thi!lg more tban the observance c4 s wnd princi~e• a.n.i oonael"!a.tiPI.
in the lllfl.intenanoe of his bus~la.. tt bap~l'a8 to be •oupiou~l1 .
true at this tins that t~ obaervance uS auch pr~ip,l.ea is a aatt~'
senioe tc the . commni tr bf Feetricting uectorlm• conewr..ptlon ud e·-o .
eaviAg goo.ie ani credit~ ~t just here it ~ wQI"th not&alg t)at ooe
teul'kable effect of the European War, eahibi.ted in· crarq >l·.iflerent
linea,. is proving to be that of emplaa.Jiaing the fleteMity of clu.i.Dg
ooDtinuouslj what Vl8 11ow find ourselves doznpeUecl 'to clo a.a a u.taeure
of temperai'J ..neoeseitJ. The War ~Ul und0\lbte417 lbOUf.a a$ one of ita
chief consequence•• changes in uihodl of procluoi1UJa ad. distribution,.
a.vo,dan~e of rouncl'!l&b.ou't facto1'J rr.etho4e &ll4 aba.ndomr.ent ot obselete ·
types of crgMliJatioa, Perhaps tbJ• will be one of the ll';ost beneficial.
results of the st·n1g~J it ia 1 at all eventa 1 ems th&t ma.7 be of veq
great aignifioa.noe to ~duatn-, %Jl the .tloel4 of p:eroa.ntile orecUt 1
't
u~.,o
1<1\ ,.
ought to be tnae at all t~.ea tha.t the pablio op4r4911 of tA& tn.lio
aulficee to cheok ua.ound aud d&Dgorou. ~otioe• wh1ob, it persil\e4
~n, rrar bring abwt W'ldue e~e•i(,ln and UDWhcleeou caond~''* b~ (.1'
prod\14tio~ and oompe\1"o~. ,, is fl<;t neoe••&ff to iu~' \lpOQ tlle
. view ~hat • • • oond~tione have often a.;peare4 &a •
,pa.~t, We ......
as I have· ~d"· nt.W· •••~ing ·to ~~~ t.n. for,.. sake ot 0\11--o~es
in ~· aziQ. clO\l'"l••• we e~l~ 8\lOoee4_.P fO ttt.ag ~ a g.-eater or lese
. 4e~~· J• it not ,._., t . o. f~,f8. Ot ~hat , . fO·~. •,OD .. O{ tkit
wU1
. ~inc\ 0\.\1' llu,\Deea an clete~ned. to re'\&ia
lea•oa rs:Jrf ·'be :
lea.necl ffQJXl this •rU. ex:perienoet ' ' wotA\cl ...". ~J taa.~r· to ·•ppoee
ao. ln that v~ew o( ~• oaoef let p o'oee. 'tlf_
·bf Nise•'\~
>yhat see~ to P to be the de sin.\le .tr,o ot CIF84't ors;at'IA~iaa to be
riaintai:ned., fof' we oa.a not an~ oaght not to eQett tp' ooa\rol ot oOA•
"\Ur.ption Will extend.· \Jef0.%14 ·the te~ti~ of •
or . .t p.. Oi\lCera
-~il,l na.eo•bU be o~led \lpon to O.o ~UOJ;"e '\haa. r.(~ · ftQlll ~<11-eeotr.e
methode ot· iti~tiug purchase.-. and oo~tt, th•4• eUone after
. the close. of the ~r wiU natura.J.+1 be mo.-e aad. mo~ coq i.aed·ito the
.. poeit~ve task· 6f xr.aking tho~ OWD.~thocls as •~ ae :poee-'~•~. ~d lees
and lee• .ievoted· to eupen1aioa ot ~~~\lm,f1&~ ~
hataite,· ot other..
~hey wil~ d.JL' to· streng-then t,_k :•re44\ o~tloa Wi\1\ a. Ylw:•o
pr.v.eatiDg the e~ie'1a~on o( .oreclit to -~4 41 , e·~trava.gant.., or un.ro1t.able
l~.·~·· · . They will stfeng\h•a aU • .,,.t~g
IJIMha.nifll:; wi\h a. vt.e•
~0 aeoei'\ainj,tlg and. inter.U.aAN i.Q'~~~iOII QOaQS~ bupest 0~41•
t~ona a.nJ. 4red~t .-a·U.np \lpoa a n..o~ eftioient 'ba.alf than a.t pweeent.
~87 wUl;, above· all thiilge, apdea:for eo fa17 aa prattiOa».e ~o ll~
war
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a,.\0\i~ ···eoonou4c d~sta;ibuti~ of Q01f14-~cU.U.ee. axr.C)Ug tbe,. cl*f&~llt aeoti~
qf tA8 oo\Ul*.rf 1 . and :~ eo do,lng ,._, w;41 fr.a.ke · chiff!··~~e of t ... llarlking
•cmaniam of, the,~ ~ountry beca.\lae they will. knc.w tbat ·u~, is t~ uohanie
which' can l;leat b~ relied upon to gua.ge the c,on~g· a.Dii a.beor~ pCNior
o,f ~e · cliUe.-.llt oom.tUn:it:~ee.· tl'otr. _thie ,poia' of v~e\f the UP· oC flnanG•
.. ing the·· ~ooal,. retailer wit:~ gracl~f ·be· t...,fe~cl (.,<* the ~euJ.er
ana ·jobber~ to v.tlOXL it never bt•onged.~ ·to tlM lo~ banter:t .w~:~
the ocm.rwa1t7 f,n which he :\.s s~tVJ&te4 and ata.ncls rea4t to :pJ'GN
•~
U.dea.,. b7 :pro'Y~1ng the oa:pit~ ~t4ed ~ol' V.le uat4ng o( allot\ 'MQUloa.a•,
deeipecl f' or the· oonduot of live o.c;mr.eroia.1, o_pe-.'\i~· · t•· .4QR'JOI'OW
P.~:pe'r of the countl')', what.ever t.!Jtel it UAJ aaawto 4 o~ hC..wey4M, it at bfl
,d.rawn, will be nade to conform to :th~l ge.cal OOiletP't4Cm. ol a~cliU'
~d J!.fOmptneea iu pafJteni. ~ thi.a,.cwa.J ~o•••• w.\~. be ollecee44 , .~flat.io~
.· . ot_ prices and overburi.Dg wi~ be. keJ?t to a.,z:r.¥~., ·a.n\t the lien ot sowaa
. ~cl eata.bliahed Qredi't wi~ 'be g.ivea aqce•a to the ~-·• a.ad ~oet Savor•·
able· ratds of accw.oda.tion to be .. br,P.4 a' any ~~.e for \is <Jebel of •••ntl•
If. ·tliese changes Qan be promplf int•ocluceci '\oday u the tea~'\ o' comr.on
and united.aotion illtended· to. prOII'lote t~11eqa and efl,~ancr·, a. rea»lt
will ha~e. been attained which, -~ ,ord~na.rt. conn:erc1a.l.. 't¥4t w~.i ba.ve
'beer1 long iela.:Ytcl be~a.u~Je of ~~ 4ov.~ and ••lf4,8~•· ·let. ~t OllCO
· be accomplia~d: ., cCil'lllon tr.a.cle ao~j.'- and "" ·~ &.» :.tOiatiel t.,t a.
resul,t a~ ono. eo easr and eo 'be¥'-~cj;a.~ ha,d never ~·~~ au~~'""d.
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@FedFRASER