The Mellette County pioneer. [volume] (Wood, Mellette County, S.D.) 19??-1971, 1920-10-22
EXCESSIVE MONEY
( RATES ATTACKED
CONTROLLER WILLIAMS HITS
BROKERS' COTERIE.
TAX HIGHEST IN THE WORLD
Currency Chief Asserts Heavy interest
Enacted Contributing Cause to
S~hrinkage in Security Values.

Washington, ID. C.-"Unjust 'blC
interest exacted on demand loans bl
New York city banks has been an ac
tive contributing cause OF the nuE'
shrinkage" in all security values dut'
ing the past year, Comptroller OF lhe
Currency Williams declared IN a state
ment. He charged that call none
rates in New York were the highest
in the world, and that renewal rates
fixed daily by a small "coterle' Oh
stock exchange brokers governed the
interest charged on brokers loans III
nearly all New York banks
THE raising or lowering OF the re
newal' rate on the exchange said Mr..
Williams, lis frequently accompanied
by upward or downward movements
in stocks and securities; II those
responsible for the fixing of the rate,
therefore, have the opportunity,
whether exercised Of not, Of profitlng
largely by operations on the stock
market which is so often and direct
ly affected by the call money situa-
ton. | do not, Of course, undertake TO
say that this informal money com
mittee' does take improper advantage
OF their f~Oreknowledge, but there are
critics who severely censure the eX-
listing arrangements. Certainly all
prudent and thinking business men
will agree that there is danger in the
concentration of such opportunity ana
power in the hands Of a few persons.
Temptation 20 use this power for IN
dividual profit must arise and human
nature is not changed by high posi-
ton in the financial world.
Power to fix money rates for all
or nearly all of the banks in New
York city and to change them daily is
a grip on the heart Of our mmerce
II permits such intereferences as fall.
ible human judgment, whim or inter
est may direct with the natural II
orderly movements of money, the life
blood of business. The matter OF ar
bitrarily fixing money rates at the
money center, possibly reversing the
natural and healthy flow and effect
ing. directly or indirectly, billions OF
dollars Of security values and other
PROPERTY is left to a small and vary
ing number of private citizens without
official responsibility deciding in a
moment and in secret.
The evils and dangers Of such
methods could be recited indefinitely.
They reach to the remotest corners
of the union and it's possessions and
touch harmfully every class OF people.
The direct tendency is to reverse n
of the fundamental purposes OF the
federal reserve act, which is to pro-
orderly distribution OF money
through the country to meet the needs
of commerce and agriculture. Excess
sive interest rates offered in New
York artificially draw money away
from outside communities through
their banks and often leave legitimate
enterprises starved or pinched, while
feeding speculative movements which
be adding nothing to real indus
trial or commercial wealth.
Il reiterate that excessive rates on
call money, arbitrarily fixed and toll
Grated in New York, in my opinion
have been a potent influence in de-
pressing seriously the prices OF all in
yestment bonds and standard shares,
the shrinkage in which in the last
twelve months has amounted, includ-
ing the depreciation in Liberty bonds,
several billion dollars