The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1920-05-21
Sixteen State Police Reach Matewan;
Three Mine Guards at Lynn Shot At
ECONOMIC SITUATION
CAUSE OF CONCERN
BY DAVID LAwRENCR
(CopyrtGht ny The IatelliIsaesr.l

erica is at the moment experiencing an
economic readjustment which the treas
ury department and the Federal Reserve
Board regard as snevitably for the bet
ter Reliance Is based upon the alert
ness OF public opinion and the readiness
OF the banking and business public to
consent TO curtailment of unnecessary
and unproductivS credits. But the view
az the executive end OF the avenue is
not altogether shared by members OF
congress, somo OF whom. like Senator
Robert L. Owen, OF Oklahoma. fear that
curtatlment OF production will result
and that the prices OF all commodities
will tend to rise because OF the scarcity
oc stocks. Other members OF congress
feel that the Federal Reserve Board
and Secretary Houston are pursuing a
conservative policy and that their prob
lem will influence the whole business
world. Incidentally Secretary Houston's
letter to Chairman Fordney Of the
House Ways and Means committee. is
intended as warning that Congress
had better cease thinking about Il SOL
der bonus and give serious considera-
ton to the prospect OF increasing taxes
TO meet current government expenses.
And altogether both Congress and the
executive departments are today more
deeply absorbed in the economic sttu-
alton than they have been since the
close OF the war.
watching washington
This renaissance comes at time
when Congress Is anxious TO get away
for the political summer. but kilograms
alrsady pouring in from constituents in
dicate that back home business men,
bankers. merchants and manufacturers
are watching Washington for any moves
10 80 often as "essential" and ''non-es-
Sential lines OF business
The effort TO curtail the amount OF
borrowing by insisting that member
banks OF the. Federal Reserve system
actually discriminate in the classes OF
loans that they make. is expected to
produce results. In fact the treasury
believes results are already in evidence.
But on Capitol Hill. senator Owens sug-
Gestion. that instead OF increasing the
interest rates. they should be lowered
TO three or four percent. has unqucs-
tionably encouraged various borrowers
70 believe that IL they get behind the
movement they can bring about a re-
est rates. Senator Owen argues. for In
stance that there should be dtscrimina-
tion on the part Of the Federal Reserve
banks In applying their interest rates
and that loans for speculative and un-
productive purposes should pay the
highest interest rates and production
should be encouraged in other enter
prises By correspondingly lower rates.
He advocates uniformity OF discrimina-
tion which means that cattiemen in
Texas should be able TO borrow their
money for the same rate as cattlemen
in Montana.
owens Contention
Secretary Houston is inclined 10 look
upon Senator Owens comments as taul-
ty and contends that ninety-nine out OF
a hundred economists would not agree
with the Oklahoma senator's contention
The head OF the treasury department. de-
claYes that the interest rates fixed by
the Federal Reserve board must bear
some relationship to the uses or money
Anf CiF
asserts, for example. that II money were
loaned by the government at three. or
four cercent, the resources OF the req
cral Reserve system would not only be
tensiye profits in other lines. For I'M
stance. ne points out that there would
be nothing TO prevent the borrowing OF
money fHom Federal Reserve banks at
,nres snms ana mSne% Railroads S and other en-
terprises paying as high as six and sew
On percent and then collecting the diff
ference "a a handsome profit.
The whole question really rerolves
not merely around the question OF what
is an essential or non-eSSenGal line or
business, but what Is an essential or
non-eSsential loan in particular ousi-
ness. The treasury believed the mem
Der banks IN their respective communi-
ties can exert the only influence that
can be at all applied in Americas com
pick economic structure and that the
cooperation Of the public alone VIII
successfully carry the whole economic
load Impress ons that may have gone
out concerning an arbitrary restriction
or credit are unwarranted lne ireas,
ury's view is merely that legitimate and
essential credits should be advanced and
that the high interest rates Will drive
speculative Investments from the bnr-
rowing market and raise money Tor
productive purposes.
Chsof m Credits
Nobody OF course. can say what rae
tors will be controlling in the read3ust-
ment that has-bee begun. but check
10 exnanslon OF credits has been applied.
Senator Owen and his school OF
thinkers believe restriction Is psychic
logically bad and produces depression.
Secretary Houston and the Federal Re-
serve board are convinced that II means
the introduction OF conservatism ana
caution. All parties are convinced that
ar the core America Is sound but they
differ az to the best way TO help sur
mount the difficulties and embarras-
ments Of an expanded credit system. OF
one thing the business world may rest
assured The Federal Reserve Board
and the Treasury are going ahead with
the policy mapped out by Governor Har-
ding OF the Federal Reserve Board be-
cause they have the power under the
law to raise the interest rates and TX
through the members banks the re-dis-
count rates. Congress has very little to
do With the matter though Senator
Owen. who is a candidate for the presi-
dency. will make several speeches on
supporters are already organizing busi-
ness mems leagues to advocate his doc
trIneS.