The San Antonio Light (San Antonio, Tex.), Vol. 42, No. 347, Ed. 1 Monday, January 1, 1923 Page: 2 of 12
This newspaper is part of the collection entitled: San Antonio Light and was provided to The Portal to Texas History by the UNT Libraries.
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BUSINESS DEPRESSION GONE
AND OUTLOOK FOR SOUTHWEST
1 IS BEST SINCE WORLD WAR
Bankers Are Optimistic Over Future Business—Cattle
Appears to Be Only Laggard Toward Prosperity.
Saving Accounts Grow —Money si Easier.
Despite zomewbat disappointing busi-
ness conditions which prevailed dur-
ing the latter part of 1922 San An-
tonio and Southwest Texas enter the
new year with a business outlook which
is probably brighter than at any time
since the World War. As a matter of
fact virtually every banker in the
city is agreed that this <ection of the
country at last faces prosperity after
several years of trial which tested the
very foundations of financial and busi-
ness institutions. With rising mar-
kets increased outputs of manufactured
goods increased demand for labor and a
general trend toward conservatism in
investments they say business depres-
sion at last has vanished and from now-
on conditions will continue to improve.
While there are some who assert that
the cattle industry is still suffering
from a depression which has seriously
affected it and that it will continue
to suffer for seme time to come others
even are optimistic in this regard de-
claring that the last 60 days has regis-
tered a market improvement and that
the next few months will find the cat-
tleman again on his feet. Although
prices for cattle are admittedly helow
normal the optimists point out that
the ranges of Southwest Toxas arc in
excellent shape that many of the
ranchmen already hare taken their'
losses and started anew nnd that pros-
pects are bright for the restoration of
nearly normal prices. The low price
1 of cattle it is generally conceded is
ihe one one drop of gat! in Hie enp
of prosperity which promises to be
full to the brim during the new year.
Saving Accounts are Growing.
The greatest dissappo’ntment prob-
ably was registered in the trend of
business during the weeks preceding
the holidays. A good price was obtained
for cotton in Southwest Texas and it
bad been expected that business .would
boom. Conservatism seemed to have
taken hold of people however and
with the exception of ' olidsy goods
there was little buying from merchants.
This did not appreciably affect banks
however as deposits held steadily.
One feature which is cons : dered very
favorable is the increase in savings de-
in the various hanks. Virtually
•Wry bank tn the ciey which hand es
•rings accounts recorded an increase
In this business despite the fact that
■ tugs ormnanly are withdrawn around
Christmas time. One explanation given
for the increase was the calling in of
government securities the Investors as
soon as they were cashed depositing
their surplus funds in savings ac-
counts. Representing a the; do the
investment of the man of moderate
means bankers say savings accounts ar.>
a good indicator of the trend of busi-
ness that is whether the people are
saving or spending.
Money Is Easy.
Below are brief summaries of the
financial situation in San Autonio and
Southwest Texas furnished by local
bankers:
Franz C. Groos president of the
Groos National Bank:
“San Antonio has made big finan-
cial progress during 1922 following the
affer-the-war slump in prices which
necessitated business readjustments on
a scale never before known. There is
every indication that such progress
will continue during 1925. In fact it
' can be said that as a rule San An-
tonio merchants and Individual opera-
tors were conservative what losses there
were have been written off any they
are now definitely on the upgrade again
"During flush times many people for-
get conservatism and borrow and buy
on credit on n large scale. When un-
expected profits do not materialize
they then have to work and wait for a
long time until they ca’ch up again.
The cattle business is an example of
this condition.
“Tn almost every other line mer-
chants and manufacturers report very
satisfactory business. The town is
growing home building and automo-
bila buying have been phenomenal.
Money is easy at the banks.
’The farming outlook is greatly im-
proved. Cotton prices should hold r
go higher. The oil business is looking
up for San Antonio and our natural
gas is a most significai t sign of fti-
tnre possibilities.”
Lena Call for Credit.
Thomas It. Lentz cas. ler Alamo Na-
tional Bank:
“All indications point to a revival
in business and trade throughout the
United States. Especially is this true
in the fields of production notably
steel and cotton. Wholesale and re-
tail trade has shown ma k <1 improve-
ment toward the latter part of the
year. Along with increases in produc-
tion and better prices for agricultural
products has eome improvement in the
.unemployment situation. Some jndus-
yrial plants report a shortage in tabor.
■Hiis surely is indicative o’/feiicved in-
Mistrial nctiyj.'rr /
rising interest rates lately in-
lmprovemeni
has been a tendem v '. -''v f ■
to pur
is being
credit
BBmparison to sale.
■KsdHtt l ” '
there should fol-
1 .*>•»'» vK
MONDAY.
shown marked improvement with the
one striking exception namely cattle
and even this has shown a tendency
lately to improve some.”
Sees Hope for Cattle.
Walton D. Hood vice-president State
Bank and Trust Company:
"Business conditions generally in
Southwest Texas in 1923 will be bet-
ter by far than n 1922. Although busi-
ness has not been ; s active as expected
we have every reason to believe tha‘ a
marked improvement is in prospect.
Crops have been short but the farmers
got ag ood price for their cotton. This
helped immeasurably.
“Lnquidation has been all that could
be expected. Money has been conserva-
tively invested there has been very
little speculation and the tone of the
financial situation generally is health-
ful. We are all optimistic regarding
the future knowing that the improved
conditions now prevailing in the East
will prevail here within a very short
time.
"There is one industry however
which still suffered. That is the cattle
industry. There has been a big sup-
ply dumped on the market caused by
forced liquidation and the prices have
dropped. I believe however that even
the cattle industry is destined to re-
cover during 1923. The ranges are in
excellent shape the demand is per-
ceptibly increasing and there is some
improvement in prices.
“One important factor is the marked
increase in savings accounts showing
a tendency on the par of people of
moderate means to conserve their re-
sources. This is sound business judg-
ment and reflects a healthful condi-
tion generally.”
Thrift Among People.
.1. E. Young cashier of the Central
Trust Company;
"Although we expected a falling off
in our savings neeounts in December
we were surprised to note an increase.
This was due perhaps to liquidation of
government securities war savings
stamps etc. but it is nn indication of
thrift. While we attribute it partly
to the government s calling in its se-
curities we are of the opinion that it
indicates thrift among the people of
moderate means and except the in-
crease to continue."
Economy on Ihe Farm.
J. K. Beretta president of the Na-
tional Bank of Commerce:
“The year 1922 was m t a good year
for business —the losses from shrink-
age in values and the flcod in our city
were severely felt here ami business
had to readjust itself —in other words
shake itself up and-make a new start.
The come-back in wool and mohair
saved our Western hill country from
distaster and the good price for cotton
ttlso helped out the fa. nine section.
During the last few months flic demand
for cattle has shown a little sign of
life although prices are very low as com-'
pared with 1919.
“Prospects for 1923 are decidedly I
good—a fine season is in the ground i
and range conditions were never bet-
ter. Economy is the rule on the farms i
and ranches and in my judgment trad-I
ing which is the life of the livestock
business will be resumed. It looks like !
money will be in good demand and
that rates will be normal although j
lenders apepar to be more exacting
and careful about security.”
ajn :"withm
Sees Lark of Purchasing Power.
W. R. King president ot the Ci y
National Bank said:
“Conditions locally probably compare
favorably with those obtaining in other
parts of this particular section ot the
state which naturally are not all that
could be desired. .
“Onr primary producers who of
course create whatever prosperity wo
enjoy have for more than two years
been operating nt a substantial loss.
Their lack of purchasing power is re-
flected in our every channel of irqde.
So long as they as at present are re-
quired to sell at a discount and buy at
a premium conditions cannot be other
than unsatisfactory.
“It is not essential to progress that
commodity values be high but that
values be relatively fair. If. therefore
success is to attend our efforts thru
there must be a legitimate parity be-
tween what the producer buys and
what the producer sells.
“A great deal is. at present bcii g
said of the advisability of the govern-
ment making further loans to our faro-
I ers and ranchmen which might be a
(good thing if predicated upon an is-
। telligent base and attended with other
I essential requirements—the intelligent
j marketing of products for instance.
"The ability to merely borrow money
may and often does become a detri-
ment instead of a blessing. With bor-
rowed funds it is necessary that tiie
money be profitably employed in order
that both the principal and interest
may be paid. Manifestly anyone can
operate at a loss for a greater length
of time upon his own capital than is
possible with borrowed money.
being true it naturally follows that
what our producers need and what
they must have if they are to survive
is gainful occupation.
"An essential commodity is worth
the cost of economic reproduction plus
a legitimate profit to the producer and
this they are not and have not recently
been receiving.
"It is far fetched to talk of gcuqrat
prosperity prevailing in this territory
with our farmers in the throes of de
pression and with our cattlemen wno
are the bulwark of our usual strength
receiving less than 50 per lent of Ihe
value of the cattle which they are cu-
pelled to market. It is a fact that
farm products have recently undergone
a material increase in prices. This in-
crease however occurred after our
farmers had largely marketed their
crops.
“Local conditions in other lines
show some improvement. Our merchants
enjoyed a substantial holiday trade and
are feeling good over the results. Mon y
in the East is plentiful while develop-
ments in the manufacturing centers and
in the oil territories including our own
section are attended with unusual ac-
tivities.
“It is certain that we are now and
1 later on will be to a greater extent.
beneficiaries of the new wealth that
thus being created.
“It is possible therefore that tie
new year may bestow manv unexpecs-
ed blessings and that within the next
' few'months we may have forgotten our
present burdens and be enjoying that
degree of prosperity which our people
■ so richly deserve"
Banks in Strong Position
They Have Supplied Ample Credit at Low Price but
Meet Hostile Criticism and Sound Central Bank-
ing Policies Will Be Needed to Avoid
Dangers.
By 11. PARK
Professor of Banking.
I Peculiar problems undoubtedly must
be faced by the Federal Reserve sys-
tem and its member banks during the
coming year. The faet that condi-
tions have developed on the whole
more satisfactory during 1922 than
bad been expected and that the bank-
ing system as a whole is now in an
exceptionally strong position is made
clear by an analysis of current re-
ports to the Federal Reserve Board
as well as by the definite statements
to that effect found in the report of
the Secretary of the Treasury. Mr.
Mellon points out that there has been
a very substantial increase in ' liquid-
ity long term and frozen obligations
being reduced while the Federal Re-
serve banks themselves have shown
remarkable power to contract just as
they have previously shown unusual
capacity to expand.
Bank Service I nquestioned.
The year 1922 has also been a period
of much happier and better relation-
ships than was 1921. Few or none
have questioned the adequacy of the
banking service that has been ren-
dered to the community. Money rates
have been low and credit has been so
abundant to all legitimate borrowers
that if was not even necessary for
reserve banks to rediscount among
themselves as they have been in the
habit of doing during the past three
years. This ought to have brought
about a much more satisfactory legis-
lative situation but instead of that
is is probably true that there has
never been so great a multitude of
hostile bills in Congress as there are
today. Indeed with the session just
opening work has already been be-
gun upon a rural credits measure
which may result in something al-
most approaching disaster should it
bo allowed to become law on the lines
already indicated. Whether it will do
so or not is still uncertain but in
the meantime (as already stated) the
year 1922 has been n period of un-
questioned efficiency in banking ser-
vice in practically all parts of the
country.
System Faces Dangers.
There is undoubtedly recognition in
official circles of dangers by which
the banking system is confronted and
as a result a strong disposition evi-
dently exists among politicians to try
to placate the general public which
leans towards inflation. With this at-
titude prevalent the question whether
ratex can lie raised in the near future
is very serious. Undoubtedly tbev
ought to be raised and that without
much delay since the prevailing mar-
ket rate is now distinctly ahead of the
reserve rate. But the . question
whether they can be disposed of
scientifically is a problem of growing
difficulty especially in view of the
widespread belief that low rates at Re-
serve Banks mean low rates in the
market although no such connection
has ever been established in our bank-
ing system. Grave danger is thus
seen to confront our financial institu-
tions. not rarely from the standpoint
of new legislation but also in the mat-
ter of administration policy due to the
unsettled political situation which now
prevails at Washington.
Scattering of Gold.
The question whether it is wise and
right to allow the vast gold accumu-
lations to beome scattered through
the country merely in order to pre-
vent "an unduly high ratio” from
showing itself at Reserve banks does
not seem on the surface to admit of
two answers. If the gold were nor-
mally ours and could be expected to
remain here indefinitely there might
be argument for this policy but the
gold is not ours in any true sense
and it may be very reasonably ex-
pected that the time will come in the
early future when we shall be called
on to transport a substantial part of
it to foreign countries in order to get
back to a footing of gold redemption.
'That being the case the plan of seek-
ing to pay out the metal now being
applied by the Treasury appears in-
creasingly questionable. The gold
quetsion is probably one that will have
to be dealt with in some statesman-
lilb way in the near future. It has
not been dealt with in that way thus
far. During the war we pursued the
policy of accumulation or “conserv-
ing" gold and since Ihe war our policy
has been such ns to compel foreign
countries to nay us in gold as much as
l-ossiblc. The regent Fordney-Mc-
<'umber tariff has carried this policy
to an extreme limit and should it be
kept in effect will undoubtedly re-
sult in still further enlarging onr gold
holdings. At the same time however
we geek to pay out the gold although
we nil recognize that a good deal of it
must go back to Europe if European
countries are to be able to get back
to the specie standard at any time in
the near future.
Membership of Federal Reserve System.
The hazards of the coming year are
not entirely international nor do they
relate wholly to legislative matters.
Tehre is undoubtedly a growing feeling
of dissatisfaction with the Federal Re-
serve system. This is seen in moderate
withdrawal of members nnd failure to
expand membership further but it is
more evident in the dissatisfaction
which has led lo efforts to break down
the par collection system and is likely
to lead eventually to n demand on
the part of country banks for legisla-
tion looking in that same direction.
Apart from this is the fnct that not a
few members of the system have been
repelled by the political attitude of the
administration towards it and nre to-
day inclined to withdraw in the ab-
sence nf a general revision of policies
and also of methods on the part of
those who are now in authority. It
seems likkly that a very considerable
revision of our hanking policy may be-
come needful in the near future.
Branch Banking Complications.
Included in such revision of bank-
ing policy is likely to be the present
situation as to branch banking. The
ruling of the Federal Reserve Board
and of the Controller of the Currency
have been distasteful to various banks
although for very different reasons in
different eases. In some ways the
objection that has been made to sun-
dry of the ruling may bo a tribute of
respect to them. That does not altkr
the fact that the dissatisfaction re-
mains. and that if it should continue
very much further it would not be
unreasonable to expect to seo the Fed-
eral Reserve system considerablv
weakened through withdrawals from
membership. Such in
THE SAN ANTONIO LIGHT.
er wilLis
Columbia University.
some districts might be sufficiently
numerous to hurt the system very
badly by diminishing its prestige. This (
would be especially true in view of ।
the fact that Congress is just now en-|
deavoring to extend the borders of the
system by letting down the bars to
the admission of state banks that are'
not at present eligible. Some action
seems to be called for as a feature of
1922.
A Conspicuous Failure.
One point in which the banking sys-
tem of the United States has scored a I
conspicuous failure as demonstrated j
by the experience of the past year or
more is seen in connection with for-
eign trade. Not cnl; have we neglect-
ed a great opportunity to develop for-
eign trade but our system of branches
has apparently been unsatisfactory in
its methods and management as il-
lustrated by the decline in the number
of such foreign branches and the
lessening volume of foreign business
which our banks have been willing to
take on. In this the Federal Reserve
system has also been at fault since it
has failed to do anything io help for-
eign trade except ocacsionally to dis-
ount some bills growing out of i
foreign business when stated in terms j
of dollars. Reports from abroad |
originating with trustworthy obser-1
vers seem to demonstrate the fact;
that there is only a lessening regard ।
for our banking and financial system
in other countries and that our with- •
draw al from branch undertakings and
the contraction of the volume of bust-1
ncss relating to foreign trade have been •
fully noted elsewhere and have tended
to curtail such standing as wc already
had in financial markets at large. How
to correct this and to get back into the
business ot providing for our own for-1
eign trade appears to be quite ns much j
of a problem at the close of 1922 as it !
over was before but it is n problem
which obviously will have to be settled
in some way and nt no very distant
date.
Farm Credits Present Dangers.
A fresh adjustment of the banking
system so as to provide for what is
called farm credit seems also to be
practically certain within the near
future. The tinkering which has al-
ready been done through the war
Finance Corporation and through va-
rious temporary expedients of one sort
or another has made little change in
the methods of financing farmers or
cattle raisers and does not seem likely
to produce much. The War Finance
Corporation is drawing near its end
while at the same time the power of
the radical bloc in Congress is being
exerted towards the getting of broader
credit facilities for the farmer. To
this in the abstract no one objects
but on the contrary every one ap-
proves of it. The difficulty is found
when effort is made to find out exactly
what is wanted as a means of provid-
ing for the farmers' necessities.
As to this there is apparently no
consensus ot opinion and the danger
of the situation grows out of the fact
that nearly all farm credit schemes
appear to base themselves upon the
idea of making long term or doubtful
paper automatically eligible at Reserve
banks thereby compelling the coni-1
mercial enterprises or the savers and
investors of the country to carry
through the medium of banking cred-
its which are of somewhat question-
able validity and which therefore
should be scrutinized with exceptional
care. Of course if this should be done
through legislation and if the provi-
sions thus enacted into law should be
actually carried into practice the con-
sequences would be to put our bank- '
ing system into the “frozen" condition
which has been so frequently com-!
plained of in times past. This danger!
belli in the legislative form and after- 1
wards in the administrative aspect I
would clearly have to be met by the I
banking system within a short rime.
Good Fortune Versus Good Banking. !
The success of the United States in '
its financial policy of late years has
been the outcome of rare good for-
tune rather than of really capable
banging. The accumulation of gold
in the United States has been auto-
matic and not the outcome of the
adaptation of our financial policy to
the situation in other countries. The I
overcoming>of inflation after the war;
was rendered possible by the faet that!
we bad at that time a capable set of'
men in position of financial author-!
ity under the government and of their'
determination to prevent absolute dis-
aster from occurring as n result of con- j
tinned price inflation. • For all these
reasons we have gone through the I
yeas 1922 with less suffering and with
greater nnd faster progress towards;
reconstruction than perhaps any
other country. Apparently we are 1
now approaching a situation where!
much more capable management of |
our banking system will be necessary I
because larger and more serious prob-'
lems must be faced while at the same
time this situation coincides with a
state of things domestically speaking. I
in which there is a serious danger of
political interference or even attack I
upon the banking system. This comes'
just at a juncture when serious de-
eisions must be taken and when there-
fore there is need of unusual support;
nnd ronn tens nee on the part of the
Executive.
The first months of 1923 will throw
light upon certain of these questions
nnd with this amount of information
in hand it will then bo possible to
foresee much more clearly and posi-1
lively the steps which must be taken'
by th banking community in the ef-'
fort to protect itself against danger. |
ns well ns in the attempt to render
the service necessary for the strength-
ening and defence of existing eondi-
tionq.
Copyright 1122
Rubber Price Increases.
The past year has seen an attempt
to restore the crude rubber industry
to normalcy by abnormal methods.
Whatever may he the final outcome
the immediate effect has been a long-
desired increase in price. For the
first nine months prices maintained
much the same low levels existing
throughout 1921 having fallen from
21 cents on January 1 1922 to 15
cents by March 1 and continuing near
the latter level until October 1. De-
spite drastic attempts st economy in
production cost these prices prribably
represented a profit to but few <if the
growers. 1
rSjUR greatest pleasure has been to serve the j
O’ loyal depositors who have made possible ।
the wonderful growth of this institution.
To each and every one we wish you a New Year 2
of Happiness and Prosperity.
NATIONAL
If BANK
CAPITAL $1000000.00
SURPLUS 250000.00
DIRECTORS
ERNEST STEVES JOSEPH COURAND OTTO MEERSCHEIDT
GEORGE C. VAUGH * : G. A. C. HALFF J. B. MARTINDALE
C. C. GIBBS ERNEST L. BROWN WILLIAM GREEN Shiner Tex.
OFFICERS
ERNEST STEVES President
J. B. MARTINDALE Vice Pres. ERNEST L. BROWN Active Vice Pres.
G. A. C. HALFF Vice Pres. ; THOMAS R. LENTZ Cashier
OTTO MEERSCHEIDT Active Vice Pres. LOUIS A. ELMENDORF Asst. Cashier
JANUARY 1 1923.
1865
TO our many custom-
ers and friends both
old and new we extend
our best wishes for a
HAPPY AND
PROSPEROUS
NEW YEAR
The
Lockwood
National
Bank
113 Avenue C
San Antonio Texas
1923
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The San Antonio Light (San Antonio, Tex.), Vol. 42, No. 347, Ed. 1 Monday, January 1, 1923, newspaper, January 1, 1923; (https://texashistory.unt.edu/ark:/67531/metapth1592264/m1/2/?q=central+place+railroads: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; .