Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-08-01
Democrats will have to conduct an educa-
tional campaign throughout the country to
present their case fairly before the voters.
A Prolitlcss Lending Power

A Proftlcss Lending Power
WIHAT profteth 4 misor from his hoard
OF gold? OF what avail TO q country
whose wheels of industry are being stillcd
is the $4,000, 000, 600 lending power Of the
Federal reserve system II that power be
not exerted? Mere knowledge that the re-
serve board has control over that vast sum
OF the peoples money will not move their
mills, make their farms produce, build their
homes or open up new markets at home and
abroad. 1t requires capital to accomplish
these things and by virtue OF the boards
unrelaxing grasp on the credit situation in
dustry is coming rapidly to a standstill when
1t should be at the peak of reconstruction.
billions of dollars are being lost, bank
ruptcy faces countless firms whose hands
have been tied by their banks, and Il nation
grows more restless, n restlesSneSS portcn-
touS or grave economic and political evils.
1t is Il fertile field that has been prepared
for the rop cation of pernicious un-Amcri-
can doctrines.
All this has been done-a nation halted
lndustrially-on the preteXt Of debating the
currency. The object is legitimate and de-
sirable, but it is absurd to Il degree that in
order TO curb proiligate expenditure for non
essentials and luxurics and to reduce the
nigh cost OF living, a nations carefully built
UP industrial and commercial structure
should have to be torn down to the ground.
is it possible that all tho business acumen
and experience supposed to have been
gathered together in the Federal Reserve
Board and it's advisers, if it has any, could
not devise a method for dciation that would
not make common sacrifice of industry with
tho war-rich proflteer spendthrift? 1t is
like razing n substantial, towering building
erected at infinite pains and infinite cost,
III oroer TO clean out 4 pile of rubbish in
the corner of its basement. AS the present
system works out the man who wants credit
from his bank for nonessentials, is elevated
to the plane Of a going concern. which must
have credit for legitimate uses. To curb
the one, the other is forced to face financial
ruin.
In order to eradicate the minor financial
ulcer the board is threatening to destroy
the whole economic system. 1t has failed
TO dliterentiate between the good and the
evil, the essential and the noncsscntial,
using its lending power 10 nourish the one,
and Withholding it from the other that it
may die OF inanition. 1t is destructive
where it should be constructive. An illus
tration OF its destructiveness is the bond
situation. The war was fought with the
peoples money, loaned on the governments
pledge Of good faith, and today, with bank
ing credit held up, its bondholders, thou
sands of them forced to sell by the general
credit situation, are offered a paltry ssh
for their 500. Then, with bondholders
sacrificed and business stagltating, allied
notably Great Britain, are using
money loaned by America-money derived
from tho sale OF these bonds-to push their
great commercial campaigns into the
worlds furthermost markets. That is the
way they handle their financial problems
that is why the United States lags behind.
1t has been suggested that the allied debts
TO America be funded through Il series OF
allied bonds. eXchangeable for Liberty and
Victory bonds, which would at once bring
the latter back to par and relieve the Amer
lean people from a large part Of their crush
ing tax burden. The plan is plausible, but
whether that or some other be adopted, the
government at Washington will be guilty
of criminal negligence or stand convicted
of incompetence if it does not restore it's
bonds 10 par and make available its lending
power that the nations business NAV be
restored.
There is n simple and effective remedy.
~ financial writer recently said: 1--WE lack
only one thing, intelligent direction of the
country's capital, and supplies OF gold,
money and credit by the authorities at
Washington He might have added that
the fault lies in the assumption OF arbitrary
direction by the Federal Reserve BOARD.
instead OF leaving 4 measure of discretion
to the member banks in the matter OF
granting or refusing credits. reserving to
itself and exercising judiciously the power
OF general regulation and supervision to
make certain that the credit system is not
abused in individual instances.
In times like these it is fitting that n
spade be called a spade. Through the
oncrous burden that has been laid on the
people by the Federal reserve banks in plac-
ing the brakes on credit" there has been
more than a Earring effect on some ner-
vous systems" 1t has shaken industry to
its foundations, II has Jared into sudden
stoppaga a country that should be going
ahead, ii has played into the hands of its
rivals in foreign fields. and from the high
est TO the humblcst homes it has spread the
epidemic of unrest. Where there is unrcs,
there is craving for n change. In this re-
public that craving :urns TO politics for re-
lief. II remedial constructive measures are
not adopted soon in Washington, tina,
change will be sought and perhaps enacted
in November.
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The merchant marine bill, under which
the American merchant marine is now tax.
| ing its riplfful p1rpn On ,ln co,, /. nth A,