We're In Period of Adjustment, Says Marshall H. Jones, Jan. 7, 1921

By Marshall H. Jones, Asst. Cashier First & Citizens National Bank

The future can now be viewed with reasonable assurance that the crest of the present wave over liquidation has been passed. When demand for consumption once more asserts itself, money and goods will again flow in normal channels and the new foundation of more normal values will give rise to a greater prosperity.

The key to the business situation is credit and the key to the credit situation is in the hands of the retailer and the farmer.

The process of reaching normal values, following war time inflation, is being hindered by the retailer who has absorbed as much credit as possible, and reduced his prices as little as possible in order to liquidate his stock with as little loss as possible. This however, can continue but little longer, since the wholesaler has pocketed his loss and the retailer must get in position to compete with those rtailers who have cleared their shelves.

The basis of new wealth is the products of the soil. When the buying power of the farmer is curtailed from 40 to 60 per cent the result must be a general stifling of business. Although these crops are bountiful, the potential demand is great throughout the world and there are no economic laws which can long keep them below most of the production. Our judgment is that many of these products got caught in the price tumble and tumbled too far. Considerable recovery is assured and the proper function of banking facilities will lend ever possible encouragement.

When movement of farm products and stocks on retail shelves enables vast quantities of paper held in banks to be taken up, the tendency will be to restore the normal flow of funds. We ought to felt he effects of this process as we enter the New Year, and especially as we approach the new life and new plans of spring and recovery of normal trade and confidence should be practically accomplished when a new crop is ready for market.

Bonds, securities and perhaps cotton futures have felt the effect of year-end selling to establish income tax losses, but this will likely be temporary.

The late Col. Roosevelt said that anyone that attempts to be a “bear” on America will go broke. In this connection a few of our abundant assets of prosperity are significant by way of comparison at this period of readjustment.

(From the front page of The Independent, Elizabeth City, N.C., Jan. 7, 1921)