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About The Evening herald. (Klamath Falls, Or.) 1906-1942 | View Entire Issue (Dec. 28, 1920)
1'AOH TIIHI'14 THE EVENING HERALD, KLAMATH FALLS, OREGON TUKHfMV, DECKMHKn ,M, 1030 - . BETTER MONEY CONDITIONS ARE PREDICTED BY N. Y. BANKER Continued from I'ngo Two) rloil by mimn of loan, which worn not liquidated In IcoopliiK with a norinnl ruin of turnovor, mill ro Hultuil In iinotlinr typo of frozen cre dit. Thn fourth grout cuunu lincumo op orutlvn In tlm pnrlod of puhlla ro- ngn mnght dovolop throURh curtail oil production, Thuro wnti llkowlo nn nlomnnt of rnnnwod commodity speculation ovlduncod liy tho with- nni( inniiy morcliunt nod innnufactur- holding of commodltlo from mnrkol urn had larger HtockM on hand than, 'under tlio mltnken Idea Hint tho re thoy could dlnpomi of within thn tun- IcoHnIon In buying would ho lompor turlty of tlio crodltH omployod tojnry, nml thai tho rovlvnl of purchas fliuiticn them, In ordor (, enrri io would ho mat hy secondary prlco those good until thoy could lm imir luitod It wan nucoHHiiry to extend thn loan, Ainu In thin pnrlod thorn was Hoover At Marion advance. TIicho worn tho four great factor which wrought a snrloti .chnngo In, nn nlumaiil of nmliitiiiica to prlco ro- tho ciuallty of our nnlloiint crodlt ro- troiichmiint In buying and of falling connlon to avoid reduced Im, r.f- source. Tho stringency In credit price. Tlm flow of koimIn wait dm- fort worn madii to maintain prlcfM ' tlint iiroso wn duo not to nn nbso tlcolly hIowihI down hy till reaction In thn iinwlso hopo that freli Mhort j lulu hortugo of iiupply, hut to tho 'fact that tho eflcoticy of tho volumo, Battery Prices Drop PHILADELPHIA tm GUARANTEED TWO YEARS Manufacturing conditions on a pre-war basis permit this reduction on the battery you have always wanted for your car. Get our prices. THE ELECTRIC SHOP CHAS. D. GARCELON, Prop. 123 S. Sixth Street i I ! tti tv Ittifififw. turiM wtfftmtil liv Urn Im. jpalrod lliiuldlty no that It coult not jnnnwer tho domnnds mado upon It. i Instead of rnvolvltiB over and ovor, J i In norinnl cycle, a largo part of our, I credit worn Minor non-llquld or Jwnro rovnlvlnR nt n very slow rnto. A normal commorclnl crodlt cycle represent thn period In which tho borrower may reasonably expect, In Hid ordlmry flow of hi partlular lino I of business, to turn ovor hi Mock fl-i , nunnid hy a loan and to ho placed fi thereby In fund from hi sale and collodion to lliiuldnto tho crodlt nt I 'maturity without rcnowal. Thin would rnleao It for n now cyclo of I productive activity. i Thn every normal credit cyclo represent work accomplished, jul n each rovolutloll of a mill whvol mean o much horo-powor deliver-' od to tho machinery In tho plant. Tlio' morn revolution, tlio morn power Is delivered. Our ccrdlt. hocnuo of ro-1 Horbort Hoover told President-elect Harding, very frankly, when ho Inownl nnd other retarding cause, 'ent to Marlon, on Invitation, to discuss natlonat and International qucs- wero making too fow revolution to "on with tho lattor, that ho thought tho United States should enter tho accomplish their normal amount of leaguo of nations, If satisfactory safeguards could bo provided. Men closo work. Although tho volumo of cro- t0 Harding think Hoovor will bo offorcd a placo In tho cablnot, most dlt was thorn, thn mill wheel wero likely tho post of secretary of commerce Flcturo shows (left) Hoover, turning too slowly. A glvon nmount , (right) Harding. of crodlt multlnlled by n clvon rnto 1 -----' --j--- mwmmwwwwwmw of liquidation produce greater bust-, mado weekly'1 by certain member la continued ovpanslon In tbo nccom-nos-powor by n lowor rato of turn- banks to fadoral rcservo board, mako Jmodatlon extended to meet business over. That Is, a million dollars ofilt posslblo to Includo recent figures needs. This oxplalns why, although hank credit loined and liquidated In tho comparison, Theso reports to aid-October contraction was not six lime in u year io iinnnca six uii- aro mauo yy uuoui auu uanxing in furent commercial transactions per- stltutlons whose resources aro cstl form more work In serving public mated to comprise somo 40 por cent needs than when tho samo million Is ,of the resources of all bank, and renewed to hold n single volumo of may bo taken to bo accurately Indl goods stationary. When conditions catlve of conditions throughout our nrlso In which tho normal turnover .banking system. cannot bo maintained tho credits There's a Thrift Road Ahead YOU'VE conio to tho parting of tbo way. Tho spend ing road leads down tho financial hill: that of saving loads up nnd out of thu valley of dolit. Which aro you going to tako In 1931? Homombor how fleeting resolutions usually aro. Then whllaylho spirit 'moves you comu In ana open n Ravings Account at. iho First National Hank. e First National Bank KLAMATH FALLS OREGON Tamales! Real, genuine, honest-to-goodness tamales the kind in which you find plenty of chick en an', Oh! that delicious flavor that you have been looking for. , !. Rex Cafe Seventh and Main Streets operatlvo In tho total volumo of cre dit, better conditions wore In sight In the banking situation. It was be cause, thcro bad been this marked Im provement In tho quality of credit. A contraction In commercial cre dits set In during October. In this must bo Increased, That Is what happened due to the causes outlined. It took an abnormal volumo of credit to do tho work demanded of It. Had crodlt remained thoroughly liquid It would not havo been necessary to United States Securities Owned January Loans Loans Secured Secured All Other by Gov. by Stocks Loans and Sccurlotlos and Bonds Investment (000,000 omitted.) 18 1.930 carry credit expansion to tho extent ' February 13. ....... 1,7 70 il was carneu. aii requirements couiu jircu 12............1 700 havo been met with a smaller amount. Although It would havo been po- slblo to havo expanded crodlt oven furthor, It would havo been unwlo!juy 16 10 no so uccauso or us impaireu ,,, 17 April 16.... .1.740 May 14.. ....1,680 Juno IS. ........... 1,6 90 -1.540 ..1,460 1,300 1,200 1,190 1,140 1,090 1,030 1.000 960 960 920 910 3,360 3,280 3,180 -3,180 3,100 3,110 3,050 3,000 3,040 3,160 3,050 10,260 10,520 10,999 11,130 11,220 11,230 11,340 11,410 11.580 11,770 11,530 Total Loans and Invest ments 16,850 16,720 17,060 17.190 17,090 16,960 16,930 16,830 17,060 17.2S0 16,840 liquuuj. 11 oecamo oviueni mat a Soptembor 17 1,490 readjustment of our credit situation' October IS 1430 and of our business structure was 'j,0vembier 12.... 1.350 Inrtvltnliln. Kvnn with niir Inernnaml . gold baso and tho clastic qualities An analysis of this tablo brings 'month the reduction of the non- Kiven iu crcuii unu currency nj mu qui somo very signiucani racts. in liquid elements also maintained a federal rosorvo system, expansion January tho number of United States rapid pace. Thus two dements of was carried to nn extent beyond securities owned by tho banks was betterment wore onoratlvo Inmroved 4 " during 1020, Thoso flguros Justify business men In oxpactlnrr our crodlt rosourco to function mora offlclont ly In tho futuro than thoy havo In tho Immodlato past tp facllltato their business oporntlons, becauso tho four great causes of Impaired crodlt In 1920 shouldf not oxert tho sam'e In fluence In tho year that lie nhond. Wo mny nssumo that war pnper, In pasilng from tho hand of tho banks, will rest permanently In tho hand ot tho ultimate. Investor, whoro It bo- long, and that It will not ngaln sor lously Impair tho liquidity of com morclal bank resource. Wo may also hopo that wo shall not In 1921 co a national transportation break down which ndded n largo portion to tho Impairment of crodlt. .Again wo may expect that thero will not bo tho samo violent prlco changos and that, thoreforo, commorclal credit will not bo employed for purpose ot com modlty speculation to tho samo ox tent. Finally, wo may oxpoct that price nnd tho production of good will bo coordinated moro closely to normal public demand and tho omorgoncy should not nrlso to carry such largo unliquidated stocks over a period ot stagnation. With thoso factors absent or re duced In degree it should bo possible for business men to find anvplo means for financing tholr operations and to mako their calculations with tho def inite assurance that tho cost of crodlt will not bo prohibitive whllo tho sup ply may bo relied upon to meet all legitimate demands. Thcro has been a tendency In somo quarters to lay tho blamo for busi ness conditions In 1920 upon credit Inflation. Tho fundamental fault was not In the mere extent to which credit was expanded. Thero was no credit Inflation In the sense that It was lavishly Increased without ro gard to actual demands. It Is un deniable that our credit expansion during the year was unprecedented. It Is truo also that It would not bare been necessary to expand credit to tho extent that It was expanded, had It not been for the Impairment ot Its efficiency as n result of tho various elements pointed out In the forego ing pages; a smaller volume ot credit would undoubtedly have sufficed to accomplish the work that was actual ly accomplished during the year It credit had functioned with Its mail mum efficiency ot complete liquidity. However, conditions and needs con sidered, credit was not over-expanded. Dut by saying that credit In 1920 was not over-expanded It Is not meant to Imply that the time Is not at band for contraction. With our credit regaining Its full' ctfllccncy. with prices going down, with liquid atlon In process and with tho vol urao of business running on lower levels, there Is not tho cconomfc de mand for the present volume ot cre dit, and thereforo Its contractions Is to bo desired. which It was not advlsiblo tp go un der existing nnd impending clrcum stance. Further expansion .would havo $1,930,000,000. Throughout tho yoar thero was an almost unbroken reduction In this figure, until on Oc- Kurthor expansion would havo itoucr .10 mo amount was only 11, sorvod to nbot moro speculation, to 1 430,000,000, a decrease of 1500.000,- contlnuo high prices and to effect over-production. Tho reaction would havo been correspondingly moro vio lent. It would then hnvo been not merely n ease, ot Impaired liquidity through, tho slowing down ot tho ability ot business to dlschargo Its credits, but possibly tho Innblllty fi nally to liquidate In full, dollar for dollar In other words, n business crisis. Instead ot furthor expansion. 000. A largo drop also occurred In tho loans secured by government se curities, tho.coure ot reduction run ning from $1,300,000,000 In Janu ary to $920,000,000 In Octobor, a do- liquidity and contraction ot tho total A reading of tho column of total loans and Investments emphasizes tho fact that It was possible tor our crodlt situation to Improve without any material deflation taking placo In crodlt as a whole. In May, Juno, July and August thcro was a tenden cy ot tho total credit to contract, but this tendency was stopped by tho sea' . , . . ... . ........., ...,,.-.., ........... croaso ot $380,000,000. Tho total ro-'sonal crop-moving domand, to which ductlon In theso two clomonts of non- tho banks, because of tholr Improved iiquiuity in tno conuuion ot tno .liquid condition, wero ablo to res banks was $'880,000,000. lit It may be assumed, that this re ductlon, appearing In thu condition ures for September nnd October. 'ot theso reporting banks, was typl- Tho situation Is yet far from nor th ere f ore. It bocamo evident that tho cal ot what occurred In our bank ro- mal. Tho continued lack ot public snfo courso was to bring about a re-j sources ns a whole, tho total roduc-1 buying has mado it Impossible tor ductlon In tho non-llquld olomont In, Hon In theso Itoms In Octobor had many commodities and for many lines pond. This resultod In tho renowed oxpanslon ot crodlt vlslbto In tho fig- bank credit; Uiat Is, to restoro Its roached about $2,000,000,000. qunllty ns far as pdsslblo to tho nor- In tho column ot loans socured by mal condition ot commercial credit. 'stocks and bonds, which It mny bo W.hnt was called for wnB not n forcl- 'assumed represents In considerable bin nbsolutn contraction of total cro-'part speculative operations, tboro dlt, but rather n thnwlng out of HUcl,wgu ulso a reduction from $3,360, credits a woro frozen by InndvlB- .000,000 In Jnnunry through a fairly ablo usos. Oijo courso was to pro mote tho liquidation ot spccilntlvoly ronowea loans omployed to withhold commodities from market. Agnln, tboro has boon n Btendy nb consistent courso to $3,160,000,000 In Octobor, or a drop In this Item ot $200000,000 . At tho samo ttmo that thoro was this doslrablo contraction In thoso sorption for Investment purposes of tbreo Items thero was a steady In iiuuriy nanus, iiiKiug mum out ui mu croaso in uiu column Biiowing an out' bunks. Also tho Improvement ot.or loans mid Investments, thoso fig- transportation mado possible by liq uidation ot credits Impounded by phy slcully rotnrdod turnover. Dy tho oporntlon of theso vorlous remedies, a material Improvomont In credit conditions was brought about with out contracting tho total volumo. Tho quality was liriprovod but tho quanti ty was not reduced. In othor words, Its ability to do tho work rcqulrod of It was partially rostorod. Not nil nt thoso factors aro ro- duclblo to dotlnlto flguros but tho ures representing principally loans for manufacturing, commercial and agricultural purposos. Prom $10, 200,000,000 In January this Itom con sistently Increased until in Octobor it amounted to $11,770,000,000, which was $1,510,000,000 more than It was tho first month ot tho yoar. As tho Incroaso In total loans nnd Investments In that period was only $430,000,000, tho proportion ot com morclnl credits In tho total recorded 11 marltod Incroaso, commorclnl bor rowing offsetting tho rotlroment ot docrenso In tho burden ot war papor on bank crodlt nnd tho shitting of .loss liquid loans ngnliiBt govornmont crodlt bo released to coiuinorclnl pur- socurltlos nnd othor bond nnd HtockR. posos 11 ro graphically illustrntod by J Theso figures ludlcato that whllo tho following tablo, Tha figures thoro has beon marked contraction chosen for this compilation, aro from in the non-llquld nnd spoculntlvo olo tho roports ot loans' and Investments ments ot bank' credit, thoro has beon of merchandise to becomo reasonably liquidated, and tho process cannot be completed until buying ouco more bo comos actlvo and production' Is again demanded. Hut tho banks have stood by business, and business may tool confident that It Is within tho power and tho Inclination ot tho banks to contlnuo to cooperate, Ono ot tho Btrikiug features ot the past year of stress has been tho special emphasis placed on tho truo relation ship ot banking and business. It used to bo said that banking was ono thing and business was another. To day tho close partnership between banking and buslnoss stands reveal ed, becauso tho banks, by tho Inti mate tlo to buslnoss fundamentals made posslblo through tho federal ro sorvo sstom, havo functioned as an Integral part ot buslnoss. Tho prosont oxlgont conditions will be worked out by business aud banking togothor, and only that which will bo for tho host Interests of both will bo tho sound courso. If tho foregoing facts nnd deduc tions nro of value, It U not becauso of tho light they throw on past events, .but becnuso ot tho promise they hold for tho futuro. Thoy car ry tho conviction that crodlt condi tions should bo moro satisfactory' during 1921 than thoy havo been KUGENK MAN WILL 111 , REATPOIXTEO COSDHSSIOXEtt SALEM, Dec. 28. Governor Alcott haa announced that IX. A. Booth, ot Eugene, will be reappointed a mem ber ot tho stato highway commission when his term expires on March 31, Asbestos with fibres as long as three toot Is said to bo mined In tha Philippine Island ot Luzon. ITo C&ke& - f ike Mother ttsetb n&keh -drnfmyf how ecou& with pure craam Tbke Home a Dcztn Dotghmris 30t