Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1919-11-14
FURRY IN STOCKS
WILL NOT |NJURE
SOUTH'S BUSINESS
Federal Reserve Bank Has
Ample Resources to Con-
tinue Its Policy, Governor
M. B, WeIIborn Declares

Indicating that the agricultural, in
dustrial and commercial enterprises
Of the south would not suffer from
the furry in the New York stock and
financial markets as the result OF the
Increase in call money rates brought
about by the procurement by fed
eral reserve bank officials against
speculative operations financed on an
inflated basis, N. B. Wellborn, gov
ernor Of the Sixth Federal Reserve
bank in Atlanta, on Thursday issued
a reassuring statement intended to
set at rest rumors and fears of a
financial stringency in legitimate
business transactions.
Speaking as the representative Of
the federal reserve system and as
the head OF the Sixth Federal Re-
serve bank, which, since it's estab-
lishment, has been Of tremendous as
sistance in financing the development
Of agricultural, industrial and COM
mercial operations in the south At
laatic states, Mr.. Wellborn assured
bankers, business men and farmers
that the institution has ample re-
sources to continue it's policy Of
sound finance along the lines already
laid down. He declared further that
the furry in the New York exchange
and in the Wall street money mar
kets would not affect the operations
Of the Sixth Federal Reserve bank.
II cannot SEQ that the financial
disturbance II New York, especially
regarding stock transactions and
speculations in stocks, will affect the
Federal Reserve bank of the Sixth
district" said Mr.. Wellborn.
I'VE have ample resources to take
care Of all requirements Of our mem
Der banks for agricultural, Industrial
and commercial purposes. This bank
has always freely accommodated it's
member banks in aiding in the pro-
duction Of cotton and other agricultu-
raj products in this district, and has
also assisted them in carrying same
in order to properly market them.
at Is not, however, one of the
functions of the federal reserve bank
to promote Or encourage speculation
in anything and the federal reserve
act especially prohibits a federal re-
serve bank from taking any redis-
counts based on the purchase or car
rying of stocks or bonds other than
the obligations Of the United States
government.
I'VE will continue to pursue our
policy of lending to member banks
on cotton, corn, wheat, peanuts,
rosin, turpentine and other commodi-
ties, when properly stored and in
sured.
"The disturbance in the New York
market appears to be strictly a spec
ulative one.
"Our discount. rate up to ninety
days on paper secured by cotton and
other commodities Is ga per cent"
Mr.. Wellborn pointed out that
warnings have been issued from time
to time by the federal reserve Off
ctals against speculative operations.
No many weeks ago Governor Hard
ing, of the federal reserve system,
speaking in Atlanta, decried the tend
ency toward imitation and urged a
gradual liquidation to a normal pre-
war basis. 1t was suggested in bank
ing circles Thursday that the rise in
call money rates in New York was
caused by the refusal of federal re-
serve banks to furnish additional
funds for transactions that were not
considered in line with sound, legi-
innate business development. This
caused an immediate demand on out
side call money, with the result that
the rates jumped from IA to 80 per
cent.
The opinion was expressed at the
Sixth Federal Reserve bank that only
in isolated instances have southern
banks been financing speculative
transactions in stocks, and these
cases have been non-member banks.
1t was further indicated that mem
her banks have had and will have
no difficulty In securing ample re-
sources to finance crops and indus
trial and commercial enterprises, and
that any demand for call money by
southern banks must therefore come
from non-member banks, Of which
there are about 1900 IN the Sixth
district