Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-12-04
RESERVE BOARn
Continued from PAGE On.

Byrnes. Democrat, of South Carol
rs the Federal Reserve Board
trial. am I on trial here?' no -.
tinued, declaring he had been a -.
get for IAN kinds of abuse" %
Representative Byrnes said
meant no reflection on Goys.ra
Harding.
Circulars issued by the regional D,
serve Bank of Richmond Va
membert banks, and which WI
Byrnes was attempting to show h..
resulted in rigid restriction of fara
res credits. were under discusSia'
Governor Harding said such Giro.
lars were not submitted to the no.
until printed when they were Ioot,
over. and attention of the issuing ~
gional banks called to anything II
board deemed unwise.
The board, he added. was No,
central bank. y
At one point. Governor Hardin.
told Representatives Byrnes lie orsf'
to read the Federal Reserve Act s,1
try to understand it. Mr.. Ryrnes v
piled that Me did understand The 80.
as he helped frame it,
Senator-Elect Hefin Of Alaha,,. 4
asked Governor Harding If the l,v
makers could issue u statement n,
the public as understanding his ia,
timony to be that the reserve bo.,,
was favorable to banks extending AZ
the credit possible to farmers.
THE Federal Reserve Board ~.
fers to issue its own statement" Gov.
ernor Harding replied
Approving efforts of the Richn,ord
bank to restrict loans for noD.ess.r
tial purchases in 1919. Governor Ha,j
ing said:
Il know some banks in South Caro-.
lima had been carrying large loans .,
cotton, some since 1917. in the face
of an active market"
Holding such cotton then h. added
on reserve bank funds. was plain.
ly specializing"
Governor Harding declared farmers
need have no fear that the banks
will not do their part and carry over.
loans On staple crops for which ,ba,.
is no market, provided the farmers,
would make a fair statement II their
condition to the bankers He ,ited
figu1es which he said showed then.
had been no restriction OF the reds.
count of agricultural paper
Secretary Houston. who preceded
Governor Harding. strongly OPPOSED
projects to revive the war finance
corporation for the purposo Of finan.
cling sales abroad of surplus farm
products. Present price declines
were due to readjustment following
the war. he said, and he saw no so'u.
ton for the problem although the
treasury department had devoted
more thought to it than TO any Other
subject for the last two months.
In the course of this testimony.
Governor Harding said diversion Of
the S70,000.000 profits of the Federal
Reserve Board for loans 10 cattle
growers would be more effective than
ifapplied to agriculture geuerally
He had been asked as to his opinion
on, the proposal of Senator Hitchcock
for employment of these funds tr re-.
lief.
The situation of the cattle growers.
Governor Harding said. stood by Il.
self and demanded relief The SUE.
gestion of Senator Hitchcock. he
continued, was outside the province
of the board and a matter with
which it was not concerned
Answering the charge OF proiteer-
ing on the part of the Reserve banks
he said they had earned So per cent
on the capital stock of s10o, OSo
and the reserve balances Of banks
amounted to $500. 00o, 00o
Doubt that exports could he in,
creased unless some way was found
for increasing European imports by
power and ability to furnish requs-
1t securities was expressed by Secrs.
.tary Houston. He did not see, h.
added. how much relief could be ox-
tended at this time in that way H
had no doubt that the War Finance
Corporation wound function should
Congress re-create it. but he said
: Il believe II would be against The
public interest"
The secretary said he believed that
the country was in for a period o.
price recession and that nothing
more fateful could happen than thai
this nation embark on an unsount
fiscal Policy in banking in sc,kin:
relief for the growers"