The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1920-09-17
HAVE BANKS A LEGAL
RIGHT TO COMBINE .
TO RESTRAIN TRADE:

If all the steel and iron companies
in the country openly combined to
lessen the volume of their output for
the express purpose of breaking down
business interests they would be hal
ed before the courts and denounced
as violators against the law which
forbids the restraint of trade.
But a combination greater in its
power for evil is busily at work. Un-
der the leadership of the Federal Re-
serve Board the banks have carried
on great campaign "in restraint of
trade" by restricting credit for the
express purpose of breaking down
wages and prices.
We need not be reminded that
banking business is entirely different
from the steel industry. The Manu-
facturers Record knows full well
something of the difficulties of finance
as viewed from the inside by real as
we'll as by supposed financiers. An
individual banker may very wisely at
times restrict credit because he has
reached the limit of his financial re-
sources. Nevertheless when all the
banks in the country under one Lead
ership have definitely combined to
break down business by lessening the
supply Of credit, they have formed a
combination in restraint Of trade
terrific in it's power for evil.
Whether the Federal Reserve
Board and the individual bankers who
are members of it can be legally at
tackled on such e basis as this, or not,
IS another question. But the fact star
es US in the face that combination
of all steel interests, which would be
regarded as illegal and criminal by
the Government and by the country,
would have a small power for evil as
compared with a combination of the
banking interests which have definite
ly sought to lessen the supply of cred
it and, therefore, to lessen the vol
ume cf business and the prosperity
Of the country.
We do not undertake to say that
legally the banking interests can be
handled by the Government for this
restraint of trade, but we do not hes
itate to say that ethically their action
is more unjust than would be a coun-
try-wide combination for the express
purpose of restraining the production
of steel.
Viewing the matter of credit from
tke i:akers' standpoint, we know
full we'll that they would scorn this
position as unworthy of consideration
and say that the Manufacturers Rec
crd lacked all financial acumen, but
we long ago learned that bankers are
merely human beings, and that their
judgment is rarely, if ever, superior
to the judgment of other business
men. Indeed, we are rather inclined
to accept the view that as a whole
the banking fraternity of the country
is Sc completely obsessed with the
belief in it's own infallibility in deal
ing with finance that it can never
realize that it is of all interests one
of the most fallible.
One day last week the New York
money market was very tight and the
rates were very high. The next day
the call loan rate was very much low
er and the financial dispatches from
Wall Street said that large amount
of money had been loaned out at a
low rate by big banking interest
for the purpose of bettering the fin
ancial situation in order to prepare
the market to welcome the early an
nou1cement of a French loan short
ly to- be issued in this country.
How is it that money can be so
exceedingly tight one day and so
easy the next day? How is it the Fed
eral Reserve Board, created for the
express purpose of preventing such
a situation, has not been able to meas
ure up to it's supreme opportunity to
be really great financial agency for
the nations advancement instead of
following along in the same pathway
which for yeals Wall Street financiers
l,..-o laop M rl-;,,o n-,t m thoi, inHi-