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> , BOO ((CARD X-1565 AF 'IER-WAR ADJUSTMENT: THE PRESENT PRICE OUTLOOK An address by A.C. Miller, Member, Federal Reserve Board, Delivered at Pittsburgh, Friday morning, June 6, 1919* before the National Hardware Association of the United States* -1 - x-1565 The perplexity in which the business mind of the country was left at the time of the armistice by the confused price situation resulting from the war last six months and particularly in the has been much relieved by what has taken place in the/.last three months. It would be premature to say that the situation has clarified itself sufficiently . to speak of the price outlook with confidence. Certain factors* however, which are destined to exercise a very considerable influence upon the trend of prices in the future, are coming to be discernible and it is worth while, because of the decisive bearing which the price situation has upon business and employment, to undertake at this time to examine them. PRICE SITUATION IEET BY THE WAR The expectation that prices would drop and go on dropping was expressed by competent students at the time of the armstice and was shared by many bus iness men. Such had been our experience after the Civil War. Indeed, some, who had in mind that experience, feared that the decline of prices might proceed so rapidly as to be disturbing. Prices dropped some 30 per cent in the first six months of the year 1865* This fact suggested that at least a considerable decline might not unreasonably be expected in the United States following the close of the great war. Such, moreover, had been a very common feature of the after-math of other great wars* There seemed to be justification, therefore, for the expectation that prices in Europe and the United States would begin to fall with the turn of the year 1918. The only question was how rapid would be the decline and how long continued. The operation of natural economic x-1565 - 2 forces and particularly the devotion of the productive energy and re sources of the different belligerent countries to peace industries was expected to do much to relieve shortages which were in part responsible for the momentous price changes induced by the war* The fact that fifty million men or more were to be released from armies and from war work led to the belief that there would be a quick resumption of industrial activity in Europe and increased production of goods and resulting declines in values and prices. general This conclusion also seemed to be the logical consequence of the acceptance of the view that the price situation, which had developed throughout the world as a result of war conditions, was highly artificial and highly inflated. Whatever differences of opinion may have existed during the war as to the cause or causes of the revolutionary advance of prices experienced, it is now coming to be more and more clearly recognized and frankly ad mitted that the chief factor in the price revolution is to be attributed to the enormous increase in the volume of circulating credit, bank notes and government currency put out in the past four and a half years. The situation in the United States is coming to be so well under stood that no extended reference to it is necessary. It is well known that in our five Liberty Loan Campaigns the Treasury has been obliged to borrow from the community and issue government obligations more rapidly than the comparative rate of savings by the people would support, with the result that a considerable part (perhaps as much as seven billions of dollars) of the several issues of bonds made by the Government have to been financed by an expansion of banking credit and,/ the requisite .. . degree, of banking currency. X~i5b5 - 3 - It is coming to be recognized that our banking and financial situa tion can never be as healthy and strong as it should be until the banks are relieved of the burden of carrying such large investments, either for themselves or for their customers, in Liberty Bond operations. This means that such parts of the community as have not yet done their full part in absorbing and digesting the government issues, must by one method or another be induced or made to save and pay up, or buy* Those who believed that this process would be rapid, and they were many, and that the Government would soon disappear from the market as a competitor for current loan funds, expected as a natural consequence that the volume of our circulating bank credit and currency would shrink and that with the shrinkage would come a lowering of the price level. Other countries, it was thought, would move along the same general course as the United States, though of necessity more slowly because of their continuing financial difficulties* A reduction in the volume of circulating media of one kind or another was, however, regarded as such an essential part of good financial policy in the process of post-war readjustment that this reduction was taken almost as a certainty* The feeling of caution and hesitation, which characterized the temper of the American business community at the close of the war, was the natural outgrowth of this expectation of the probable future course of prices. It is well known that this.view was shared by an important agency of the Government, which was set up for the special purpose of assisting the expected downward course of prices by gradual and orderly price revisions. By mediating the transition from war prices to peace prices, the Industrial Board of the Department of Commerce undertook to bring about the resumption of industry and its adjustment to x-1565 - u > anticipated conditions more quickly than if left to the .unassisted working of natural economics forces. Price stabilization m s expected to bring buyers in to the market, particularly for basic materials required in construction work and thus toaccelerate the process of industrial readjustment and improve the employment situation. The abandonment of this policy by the voluntary retirement of the Industrial Board and other steps that have been taken toward decontrol of industry have left the process of readjustment pretty much to the unimpeded action of the market. The movement since the armistice is interesting. For the first month or two there was little or no change; with the opening of the year 1919, prices moved downward, though slowly; toward the end of March the downward trend halted and with the beginning of April there is a notice able upward trend - most narked in the retail trades and those manufac turing trades which are closely auxiliary to the leading retail trades (such as the textiles, clothing, boot and shoe trades), but with some evidence recently that it might develop into a more general forward move ment. At the moment, prices are close to the war level and, in many instances, moving forward. Many questions are raised by the be.havior of prices since the armis tice: Is the recent forward trend to be regarded as indicative of the probable future course of prices, or is the advance to be regarded as ac cidental and temporary and as merely marking an interruption of the expected downward trend? These questions, of course, can not be answered with positiveness. The factors which influence the price situation and to which it is responsive, even under normal diverse and frequently so conditions obscure that are so -5 - x -1565 the resultant is always a matter of great uncertainty. The unexpected is apt to supervene and destroy the validity of even the most carefully considered forecast, As a result of the war, the price situation in all parts of the world has become so vastly complicated that conjecture is perforce a much more hazardous under taking than usual, particularly if any attempt is made to deduce general conclu sions from tendencies discernible only in particular industries or groups of industries, so subtle and exceptional are the influences now at work in different fields of industry* PRICE SITUATION CLARIFYINGHowever hazardous the undertaking, it seems nevertheless worth while to direct attention to some of the underlying factors which seem now to be emerging and which seem likely to exercise an important bearing upon the future trend of prices, looking forward: (1) to a period of some years, during which the general readjustment of the world* s industry and trade is being worked out; and, (2) to a briefer period of a year or more, during which Europe will be in the first stages of her reconstruction. All business calculations run in terms of price. Business judgments are for the most part price judgments* Baw materials, labor, fuel, and the other requisites of production are bought at prices; they are converted into goods to be sold at prices. Unless the prices at which the requisites of production are bought and the products are sold are fairly calculable and a satisfactory margin of profit shown between them, the attitude of business will be hesitant. Falling prices are, therefore, obviously to be regarded as an addition to the ordinary hazards of industry. It is therefore a question of vital concern to inquire whether the price situation has clarified itself sufficiently to suggest some expectation of what may be the future price trend. Until Europe recovers industrially and brings its productive capacity up to what will be normal for its decimated population, no considerable or rapid fall -6of c o m m o d i t y pric e s is, in m y opinion, to be expected. X-I5b5 Indeed, u n t i l the p oint is reached where the process of recovery is well under way, a rise of prices r^the than a fall is to be expected. Should the eventual outcome show what some have often predicted that the war has given an added impulse to the inventive spirit and to the instinct of thrift, the resulting increase in production and savings would have an important effect in hastening the readjustment of prices. It cannot be too strongly emphasized that it is only as more goods are produced in exchange for the inflated currencies of the world, or more income saved from earnings and used for the purpose of liquidating loans and advances made by the banks, that the financial and credit situation will gradually be improved by the reduction of outstanding bank liabilities and prices respond by a gradual fall. How long it may take the movement, as thus defined, to run its course, no one can predict# It is a matter of common knowledge that it w^s fourteen years before the currency disorders growing out of the Civil War were measurably corrected and the greenback dollar brought to a parity with gold. It took Europe fifteen years to effect the restoration of public credit, reorganization of currency and banking, and the readjustment of industry to a stable basis, after the close of the Napoleonic Wars. Considering the vast reach of the present war, which on its economic side has not yet closed, and considering the great destruction of in dustrial and financial capital, the terrible disorganization of industry, and the impairment of the morale of the working forces of Europe, there seems little reason to expect that the process of reconstruction and readjustment, first the one and then the other, through which Europe is about to pass, will be short or easy# Ten years would seem, on the whole, a short period in which to expect a restoration of economic conditions in Europe to a normal basis and the rectifies tion of the price situation# X-1565 - 7 NATURE AND LENGTH OF THE A D J U S T M E N T PROCESS: The process of economic readjustment has seldom run its course smoothly or quickly. Such has been the universal experience of the world since it entered upon its modern course of economic development. The pro cess of readjustment and reconstruction is complicated, in the present instance, by reason of the fact that it is more than an economic process that is involved - social factors and psychological factors of the most far-reaching and portentous consequence seem to be involved. Such, clearly and certainly, is the case in Russia and such is the condition threaten ing or impending in some countries which have ordinarily been recognized as belonging to the western group of nations- Different parts of the European world are in the stir of a social ferment. It may well turn out to be the judgment of history, when the record of these remarkable years is written and the transformations, set in motion by Germany’s onslaught on the s trueture of civilization in 1 9 1 h, are complete, that the most momentous consequence of the war will prove to have been the economic and social revolution which it set a going. There are people who believe that we are now in the midst of such a revolution and that when the emergence is finally complete, the world will be under the dominion of a very dif ferent economic and social order from that which seemed secure in its foundations only five years ago. Obviously, if some thouroughgoing changes in the fundamentals of the economic and social system of the Western World have got to be reckoned with in the process of economic readjustment and reconstruction, it might well be expected that a very considerable period of time will elapse before anything like a settled and stable working order will have been evolved. x - 15^5 - 8 e i\\ Indeed, such a process could only by a euphwiism be described as readjusts ment. There would be too little left in it of old ways of doing things old points of view. It would then be a veritable reconstruction. I do not, for my own part, look for any such far-reaching overturn in the established order. The world may be passing through a revolution in thought, and possibly in spirit, but that is a very different thing from a revolution in social and economic institutions. It takes much time for a change in thought and attitude to take shape in new institutions. The wor3.d has become too big and too complex quickly. to change its habits and institutions However desirable changes may seem, when regarded from the lofty and detached point of view of speculative economics, and however easy of attainment they may seem t o those who are impatient for progress, the instinct of self-preservation and the instinct of orderly development in the free democracies of the Western World will protect them from plunging into the chaos of careless and hasty social experimentation. The world must be These require extensive and constant provision, fed and clothed and sheltered and cheered./ They mean that the work of the world must go forward from day to day without interruption, lest hunger, hardship, misery and the degradation, despair and demoralization*, which they Western breed, result. The common sense of the World may, therefore, be ex pected to see the wisdom of making haste slowly in undertaking modifications men 1s of the economic and social system under which energies are brought to bear on the problems of sustenance and maintenance, lest in the process of change we lose what we have and gain not what we seek. Assuming that the good sense of the Western World will protect it against the ignorant assaults of those who would rashly overturn the exist ing socio-economic order, the problem now awaiting the action of the re cuperative forces of the world may be regarded as a problem of economic x-1565 - 9 readjustment. The working organization and mechanism of the Western World, which has been wrenched and warped by the stress and strain of war, is to be readjusted so as to meet the requirements of peace industry, as these were ccm~ monly understood in prewar days, at any rate as concerns the fundamentals. Even thus, the problem will have its very considerable difficulties. proicuhd changes have taken place in the relative economic capacities of the different countries which are bound to produce great changes in the economic relation ships of the principal nations. Time alone can determine to what extent the positions of the different nations in world-industry, world-commerce and worldfinance have been altered by reason of the disturbances produced by the war. Every day is making it clearer and clearer that our own country has been extensively and profoundly altered both in economic capacity and in ti>& outlook, and that its position and relation to other countries of the world have exper ienced a like change. It has become a commonplace that we have become a credit or nation-, and a world-banker - the most potent single force in the reconstruct tion of the world!s finances. For the most part, finance merely reflects; it is not itself, in any important sense, a cause. The change in our financial re lationship to the world is, therefore, to be regarded merely as a reflection and measure of the momentous changes which have taken place in our economic position. Unavoidably and without our seeking, we are to have a larger part than ever be fore in the alimentation of the world and its industries. to larger part in the shipping of the worM. We are We are to have a have a larger part in sup plying, out of our own vast resources, ^ world which has been wasting almost to the point of exhaustion its supply of basic materials. The world is daily be coming more conscious of its dependence upon us and we, ourselves, are coming to a new consciousness of our vast resources and productive capabilities- It is these that, in the long run, determine the relative positions of countries in the organization of international trade and industry. No one, therefore, can say offhand or in advance to what extent a redistribution of industries is to take place among the different x-1565 10 - countries £ what countries are going to produce what goods and in what proportionin what markets they are going to huy and sell and what other changes will result in the relative valume of foreign, as compared with domestic, trade, in conse~ quence of the war. Relative advantage is the pole-star of international trade* "but to what extent it will divert trade from markets that were customary before the war and to what new ones, that have been developed during the war, time and actual experience alone can tell. Until the new equation of international demand the and supply for each of the leading nations of/ world has been worked out, the process of readjustment will not he complete. Indeed, internationally viewed, the reestablishment of these equations is the problem of economic readjustment. The nearest analogy to the catastrophe through which the world is now moving is supplied by the Napoleonic Period and the restoration. For a period of 22 years, beginning shortly after the French Revolution, international commerce and industry were thrown out of gear almost completely, In the meantime a revolution took place in industry associated with the invention of the steam engine and many mechanical appliances in the textile and metal trades, which marked this period as the beginning of the m o d e m era in industry. Great changes were found, when 1615 peace was established in to have taken place in the economic capacities of the several nations which required that a new adjustment of international trade arfL industry should be worked out under which each nation would find its new position. It took fifteen years before the several nations had finally found their places in the new international economic order and things settled down to something which could be regarded as a stable basis. The fifteen years from 181530 ace suggestive of what the world may now have to go through before a stable basis is reached in industry and commerce and prices are readjusted. They were years of uncertainty, years of commercial rivalry, years of economic difficulty, years of fluctuating price levels and characterized by alternations of periods 11 - x-1565 of intense and feverish activity in trade and industry with periods of shapp reaction, depression and frequent unemployment„ sometimes intensified by conditions of crisis or panic. DEFLATION IN EUROPE AN) TEE LONG-PERIOD PRICE TREND: look, The general out therefore, may be said to be for a gradual fall of prices during the next ten upon years or longer, depending mainly how rapidly Europe will recover her productive power and correct her currency disorders by deflating her distended currency. -l£ - x-156 5 Those who take a more sanguine view should not overlook the bearing which an artificially forced rapid deflation - should that in any event be practicable - would have upon the debt status of the European Governments. One of the main reasons for believing that deflation and, therefore, price reductions, will not proceed rapidly in Europe is derived from this cause. The enormous debts, which the war has left European countries, have been contracted in terms of depreciated currencies; by and large commodity prices are double or more than double what they were in Western Europe in 191^-► They have increased 100 per cent in the United States; they have increased more in England than in the United States; more in France than in England; more in Italy than in France; in Russia and in the countries that constituted the former Austro-Hun*garian Errpire, conditions are so chaotic that no basis for comparison is available. If prices could be and were put back to their pre-war level, the effect would be much the same as doubling the debts of the several countries of Europe while maintaining their existing price levels. Such a proceeding would, of necessity, of national debts place a burden of taxation virtually so heavy as to force a repudiation/under one guise or another. Even under their existing depreciated currencies, European countries are struggling with the problem of handling their great debts, and their enormously swollen national budgets. This condition alone, if nothing else, would will seem to compel the expectation that deflation be a slow process in Europe and that*. as deflation will be gradual, so the fall of prices will be graduo. Many factors will, no doubt, enter into the restoration of the value of the in flated currencies of Europe. But, in the end, it is likely to turn out, as in the United States after the Civil War, that Europe*s main reliance in correcting the present condition of inflation will be the natural process ofngrowing up" to its now - excessive and redundant volume of currency. > With the pricewStructures in all leading countries more closely interlocked X -I5b5 -1 3 than ever before because of the new community of interest and fortune resulting from the war, no one country, like the United States, can set itself apart and maintain a price structure very far out of line with the world price structure* price movements in the United States are bound to be affected by the price move ments in Europe and no great changes in tne price structure of this country are tc except be expected/as they reflect, in part, changes in the world *s price structure* with the larger part of the commercial world in a serious condition of inflation and no prospect that the period of economic readjustment will be a short one, the fall of prices, to which many have been looking forward as an inevitable consequence of the war, seems likely to be a slow one; so slow that for most ordinary purposes in making business calculations and in reaching business judgments it may be taken as a negligible factor. While prices, looking forward over a long series of years, may assuredly be expected to show a downward course, the fall of prices from year to year, it is to be repeated, will probably be so small as to make possible losses from the decline a factor of no consequence, except in the case of long period investments of fixed capital upon an extensive scale, when it would probably be a wise precaution to set up special sinking funds to amortize shrinkages of value from this cause* While the general trend of prices for the next ten of fifteen years may be expected to be downward, the downward movement is not likely to pursue a steady and unbroken course. It will probably be broken by frequent ups and downs :. the 'n process of finding a new normal level because the general process of economic readjustment is likely in each important stage of its development to result in some ma 1-adjustments, which would inevitably produce price disturbances,, The future price trend, in other words, is likely to have much of a fro.ctua* ting character and, therefore, to give to the period of readjustment something more of a speculative character than is usual in normal circumstances* EUROPEAN NEEDS AND THE SHORT-PERIOD PRICE TREND_______ So much as regards the general and more distant price trend. As regards the -1 near future, there is little reason, x-1565 I think, to exp e c t an y m a r k e d interru p t i o n of present price tendencies in our own and other leading markets, mainly because of the world’s urgent need for goods. Europe is in a bad condition in nearly e-'ery way ' economically, socially, politically, physically and psychologically. The process of disbanding the armies and getting the men back to farm and work shop is proving a difficult and slow one. Idleness since tho armistice * orksd its effect in industrial demoralization. One of the main problems presented by the transition to peace conditions is the restoration of the economic morale of large sections of the population of Europe. Feeding the hungry and clothing the naked is an obvious and immediate necessity; equally necessary and as inportant in its general effect is the alimentation of industry in Europe with raw materials restocked; and equipment ; farms must be implements are lacking; the railroads mu si largely be reconstructed; machinery must be rebuilt or replaced; everywhere there is need of basic materials and tools before Europe can get back to a condition where she can produce goods enough to sustain herself and pay for her inports. It will take time to effect this work of restoration and repair. While no accurate estimate can be made of the needs of the several European countries, enough already and is known to make it clear that they are/for some time will continue to be very considerable. Whether it will take one or two years to accomplish the first stage of her reconstruction, it seems certain that until it is accomplished her needs will tax the ability of the non-European world to the utmost to supply foodstuffs and raw materials. It may be expected, therefore, that there will be a very heavy demand upon our markets for a great variety f f goods during the first phase of > the reconstruction process, provided we are able and willing to finance Europe in its purchases for such a period of time as Europe must have before making fimj. settlement: that is, provided we supply by loans the capital needed in Europe to assist her recovery. The most inportant thing now, from every point of view, is that Europe should “15- x-1565 go to work. In those parts where they can not work because they lack the tools and materials, they must be helped to work* Where they do not want to work, becaused demoralized, they must be made to work. Hunger and idleness are one of the greatest menaces in Europe. They present the immediate objectives of policies of cooperation with the reconstruction needs of Europe * Momentarily, Europe lacks the means of paying for the food and material that she must get from the outside world. She has no goods to give in exchange for these at least not in adequate amount; she has no gold which she can spare, nor do we, or other nations in our position, need or want more gold* But with fair prospect that her economics'and political morale will be restored, she has what should be acceptable to us in the process of extending economic assistance, to wit: credit. The foundations of credit, both national and private, are reputation for integrity or good faith and demonstrated economic capacity, and these, fortunately, still exist in Europe* The prospect, therefore, is that there may be expected a very considerable credit demand for American goods, that is to say a demand both for r goods and for the credit with which to buy them during the initial period of European reconstruction. The short-period price trend may, therefore, be reasonably expected to rule high, if our exports to Europe on credit continue on anything like their present scale. FINANCING- EUROPE! NEEDS. S imports We are now exporting a net excess of goods over what we are'receiving as at a rate of well over three thousand millions of dollars a year. Assuming that the value of our annual output of goods of all kinds and descriptions amounts, unde present conditions, to sixty billions of dollars or more, the exportation of a net excess of three thousand millions means a loan to Europe of capital goods to the extent of five per cent of our total annual production. On its purely economic side, the question whether we can indefinitely go on doing this reduces itself to a question of productive capacity. On the financial side, it reduces itself to the x-1565 -1 6 - question of our willingness to save and add to the capital supply of .America available for use in Europe after the needs of our own industry have been reasonabprovided. Beyond that the question is a technical one; it is that,of devising the best form of machinery for mobilizing such capital as can be spared for the purpose for the use of Europe. Complete and accurate data are not available for estimating the extent to which the productive capacity of the United States has increased in recent years, much Hess have we any satisfactory indication of the increase in the capital accumulation or in the saving capacity of the Uhited States. There is, however, sufficient statistical foundation for an estimate of a l6 per cent increase in the productive capacity of the United States in the past five years (measuring the increase not in its money value but, far more significantly, in its physical volume) to warrant the use of this ratio in attempting. evaluate the increase in the to financial capacity of the United States. Accepting 35 billions as an approximate estimate of the money value of the total product of American industry before the beginning of the European War, an increase of l6 per cent in the physical pro ductivity of industry would yield at the 1914 level of prices an increase of 5*6 billions of dollars in the money value of the nation's economic productivity* But figured, as the increase should be, on the basis of the is some 100 1918-19 price level, which per cent higher than the 1914 level, the increase would amount to 11.2 billions. It is noteworthy that this increase in the economic productivity of the United States has taken place without the usual addition to our working forces from immigration. The period has been one of emigration, rather than of immigration, in This increase the annual productivity of our industry may, therefore, be regarded as pretty much a parely economic surplus, after making deduction of course for the expense of taking care of the natural increase in our population, which has occurred in this interval of time and which is estimated at some three millions. Because the increase in our national productivity as above estimated, -17- X-1565 has been mainly duo to the fact that the industries of the nation have been worsting at a high pitch of intensity under the impulse that was given by war conditions, and also, to the fact that a larger percentage of the nation, than before the war, entered the ranks of its productive workers. Bearing in mind that the capital which Europe needs and will seek to obtain from us by borrowing will consist of goods which are the product of American labor* it is obvious that the process of accommodating Europe will involve either the con* tinued high activity of American industry or a reduction in the amount of goods available for American consumption. In either event, must there be saving. Nation ally, the qiestion is whether we shall undertake to finance Europe by savings out of a reduced volume of production or out of a sustained volume of production. In the latter event, the problem of making reasonable advances of capital to Europe should present no great difficulty economically. The problem will then be to con vert an adequate amount of the potential savings of the nation into actual savings* In the former event, however, the question would present almost insurmountable difficulties and the attempt to undertake ary considerable financing for Europe would probably in the end result in the forced growth of the savings fund of the nation by a further inflation of credit and a further increase in the cost of livings No more pressing financial problem confronts the United States than the sett ing up and putting in motion the machinery for determining the extent to which we can safely undertake to finance reconstruction in Europe* Fundamentally the problem is one of kesping the industrial activity of the nation stimulated and, equally important, keeping the savings spirit of the country from weakening. The people must everywhere be made to appreciate that in the present condition of the European world, it is our urgent duty to keep up our newly acquired saving habit* Beyond! that a sufficient portion of the community must be educated to an interest in the purchase of European obligations or American obligations based upon European collat eral. More than this, some competent agency, which will merit the confidence of the American people - national and representative in character but preferably not —1 8 — x -15 6 5 governmental - must “ set up for seeing to it that the apportionment of such be capital as may he yielded, by the savings of the nation shall be made wisely, with due regard for the economic needs of American industry and the American consumer, as well as the needs of European industry and the European consumer. The opportunity to make financial and traders1 profits out of the needs of Europe by the sale to Europe of goods and materials on long-term securities floated in the American market is such that great care must be taken that such operations are constantly kept within the limits of national economic prudence, both in our own interest and in Europe^ interest. It would therefore be advisable to set up a Committee on Financial Facilities for Europe composed 6f a membership - following the analogy of the Federal Reserve organization - one-third representing financial interests, one-third commercial interests and one-third, to be selected by the Federal Reserve Board, representing the general public interest. But whether this or some other method is adopted, it is of primary inportance that a national and representative character should be given to any movement for the mobilization of our financial and economic resources for Europe’s use. The matter is one of too grave consequence to be left to the determination of private interest alone. The situation offers so many temptations that abuse of the credit facilities of the Federal Reserve System would be almost certain to result with a further and disastrous inflation of credit as a consequence. No method of providing for the financing of Europe that does not contain careful safeguards against this contingency can be regarded as satisfactory. What Europe needs is capital. The Federal Reserve Banks are not investment institutions; they deal in credit, not capital. The attenpt, under any disguise, to use their facilities as a substitute for capital would be fatal to the Federal Reserve System and injurious to the public at large.
@FedFRASER