The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1920-10-06
RESERVE BANKS
BACK FARMERS
Byrnes Publishes Correspondence
With Houston-Secretary Re-
ferred to Treasury Not
To The Banks.

F. Byrnes of Aiken today made pub
lie telegraphic correspondence with
Secretary of the Treasury Houston,
which shows that the secretary in his
statement of last Monday referred
only to the attitude of the treasury
department and had no reference to
the policy of the federal reserve bank
system in discounting the paper of
member banks. The secretary advises
Mr.. Byrnes that he is in accord with
Governor Harding's definition of "or-
derly marketing" as meaning the mar
keting of the cotton crop gradually
The telegram of Mr.. Byrnes to Secre-
tary Houston on September 26 reads
as follows
Gall trade reports indicate your
statement construed as intention OF
federal reserve bank not to discount
notes secured by cotton. Satisfied this
not your policy. Statements of Gov
ernor Harding in his cleveland speech
defining orderly marketing was re-
assuring to entire trade. II you are in
accord can you not issue statement
as to what you meant by orderly mar
keting? Any course other than that
outlined by Governor Harding would
result in speculation by mills and
buyers at expense of producers
Reply of Houston
Secretary Houston's reply of the
29th states:
my statement is am in favor of
every legitimate effort to promote the
orderly marketing of all commodl-
ties, but the government can not be a
party to an undertaking to hold COM
modities off the market to enable the
owners artifically for speculative pur-
poses to maintain war prices or high
er than war prices"
'In speaking of the government, of
course, was speaking particularly of
the treasury. l was not speaking of
the banks. They are not the govern
ment. My statement was induced by a
request of people that the treasury
either deposit money in crop moving
sections or that it revive the war
finance corporation activities. Either
of these things would necessitate the
treasury's borrowing more money at
the high rates at which it is now bor-
rowing to meet current obligations.
1t has no money to deposit except for
government purposes. The war fin
ance corporation would only assist in
financing exports. This power was
given at time when it was feared
that exports would not go forward.
Exports have increased steadily to
enormous proportions and are now
running at the rate of over S8,000,-
100000 for the year.
Could Not Borrow.
"Obviously the treasury would not
be warranted in borrowing money to
further stimulate exports or to depos-
ii for lending purposes. The treasury
should not be in the banking business.
1t may interest you to know that six
times as much is being rediscounted
in certain reserve banks for crop
moving sections as has ever been de-
posted in such sections by the treas
ury. There is no conflict between my
statement and Governor Harding's.
He was speaking for. the reserve sys-
tenn. I assure you that I am in ia
vor of the orderly marketing of all
commodities. Governor Harding as
serts the same. The banks are lend
ing more money today to agriculture
and industry than has ever before
been lent. I have repeatedly express
ed myself in favor of orderly market
ing and of the promotion of coopera-
tive marketing among farmers. I do
not see how can add anything to the
statement. My insistence on the de-
STABILITY of orderly marketing is
pointed by my statement as to the un-
wisdom of enterprises holding COM
modities off the market artifcially for
speculative purposes to maintain war
prices or higher than war prices. I
assume that the great mass of the