The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-07
HOUSTON REJECTS
CROP CREDIT PLAN
Depositing Of U. s. Funds to
Ease Situation Is Not Feas-
ible, He Says.

special Dccp0tcH " I'm AtH"h-S'
WASHINGTON, Oct. 6.--Deposit or
Government funds in the banks OF
the country to help crop movements
or the extension OF further Govern
ment aid to the War Finance Corpora
ton for this purpose are both imprac-
teal at this time. according TO an Of
ficial statement from Secretary OF the
Treasury Houston.
The Secretary declares prices are
bound to fall because the people will
not continue to pay war figures He
expresses the view that proposals of
artificial stimulation that would tend
to hold prices at or higher than pre-
war levels is untenable.
The views Of the Secretary on these
questions and on the credit situation
were set out In detail in two letters
written by him to an unnamed cor
respondent. Evidently the unnamed
che had ohided the Secretary for fail
ure of crop loans and his statement
that the Government could not be a
party to any undertaking that would
artixicially boost prices for producers.
Credits for crop moving. extended
through the Reserve System, the Sec.
rotary pointed out, are six times as
great as the maximum Of Government
deposits for this purpose In any previ-
GUS year.
Secretary Houston's Statement.
'.rhe problems confronting the banks
Of the nation are complex and difficult"
said Mr. Houston. They will not be.
solved to the satisfaction OF every
body. but think to those who know
the facts and think fairly It will APP
pear that the banks OF the country as
a whole are functioning very effectively
IN handling the problems confronting
them in extending accommodations to
meet the needs OF industry and agri-
culture.
Il am sure that you have In mind
the extent to which credits have been
extended. You know It became neces-
gary to take steps TO see that the banks
were in position to meet the seasonal
demands resulting especially from the
marketing OF our large crops AS a
, result Of these steps ! believe that
the banks VIII succeed IN assisting IN
huancing crop movements and In TAX
,nx care Of Industrial needs, although
Of course not without dificulty.
1T is not true there has been a con-
traction OF credits. On the contrary
there was an expansion of credits during
the twelve months from the end OF Au-
gust, 1919, 70 the end OF August, 1920,
and there has been an upward tendency
since the crop movement began. Be-
tween the end OF August. 1919. and the
end of August, 1890. the loans and invest
naents of about 500 reporting member
psnks increased approximately one and
third billions OF dollars. AS these
reporting banks represent about 40 per
cent. of the resources of all the banks
Il is estimated that the total increase in
loans and investments for the twelve
months indicated was over four and a
quarter billions Of dollars.
Even from January %, 1920. when
the increase in discount rates went into
effect 10 August 81. 1920. the loans of
about 500 reporting member banks ex-
elusive OF loans secured by Government
obligations and other stocks and bonds
increased about one and n quarter bill
ions Of dollars. This would reflect a
total increase OF commercial loans I'm