New-York tribune., 1920-10-22

Armstrong, vice. president, Commercial
Trust and Savings Company, Memphis.
The consensus was that the Southern
bankers of the small cities would sub
scribe to stock in the corporation IL
the leaders in the large cities took the
initiative. The corporation would be
permitted to extend credit through ac-
ceptances up to ten times the amount Of
their paid-in capital.
At the meeting of the national bank
section the friendly spirit shown tow
ard the Federal Reserve system was in
sharp contrast to the attacks made yes
terday on Governor Harding and his
colleagues at the meeting Of the state
bank section, because Of the cam
pagn to make checks collectiDc at par
throughout the United States.
After praising the central banking
officials, the national bankers in a
resolution pledged themselves to aid in
the liquidation of farm products in an
orderly manner and gave assurance to
the men on the farms that credit would
be found
Business in Sound Condition
"Thc banking reserves of the coun-
try" the resolution said further, "are
ample to provide for the movement of
crops, and we recognize farming is a
DaSlc industry IN WnlCn our country lS
vitality interested"
officially placed itself on record as be
lieving that industry and business all
over the country were generally in
sound condition. This view has been
informally expressed by many dele
gates to The Tribune correspondent
and represents the prevalent opinion.
Bankers senscd the need of readjust-
mcnt before most business men, and
now that industry has begun to recede
financiers are inclined to look ahead
to the next cycle. A minority of the
delegates take a more pessmistic view
and assert that no improvement in COM
merce is in sight for several years.
Moreover, these disciples Of the un-
pleasant forcsce in the near future
great Increase in the mortality rate of
business institutions. AS matter of
fact failures have been mounting for
weeks and movements already under
way arc expected to cause a quickening
OF the removal of the less fit from the
field of competition. But most of the
delegates arc looking beyond this
period and assert that the reaction
from the excessive imitation is step
toward soundcr finance and trade.
Respecting the reserve system, res
oiution, unanimously accepted, said:
I'm the opinion of the national bank
section of the American bankers AS
sociation, the policy of the Federal Re
serve Board and the Federal Reserve
banks in the last year has been gov
erned by wise purposes TO check inha-
ton, and we do not believe the fall
in prices which has occurred has been
caused by credit restrictions; rather ii
has been due to world wide conditions.
1t would have been more serious had
credit expansion gone further. With
a little more of the spirit of economy
the present distress Will be corrected )"
Ought to Educate People
Pierre Jay, chairman of the board Of
directors of the Federal Reserve Board
of New York, addressing the section
urged changes in the practice Of the
regional banks and the member insti-
tutions. lie said the people generally
ought to be educated as to what the
Federal Reserve system can do and
what its limitations are. asserting that
this campaign of instruction ought to
inform the country that the central
banking scheme is not financial cure
all.
He recommended that the Reserve
banks develop further az great service
stations for the member banks and
p"lHleu out ChaV. the great potential
power of the Reserve system to be
helpful in directing international gold
movements is now dormant, since en-
bargoes on the export of the metal are
still in force in many of the leading
countries. He added that the Federal
Reserve banks were formed to help the
other banks take care Of their custom
crs' credit needs, but did not want
them to borrow funds to re-lend in the
open market. Moreover he asserted
that the system was designed to pro-
vide for occasional or seasonal cxpan-
sion of bank credit, not continuing
borrowings, such as developed during
the war and since
Mr.. Jays advice to the member banks
was; Study the ways in which the Re-
serve system can work for you, explain
the system to your customers, take ad :
vantage of the present unusual appetite
for credit to place every account on a
paying basis, get DID, long standing
loans on the road toward liquidation,
eliminate unnecessary till money and
make all your dollars earn for you and
put temporary investablc funds into
bankers acceptances.
Row on Gold Bill
The expected row over the adverse
report on the McFadden gold bill be-
fore the entire delegation at the third
morning session at Keith's came as
scheduled. On behalf of the gold bonus
committee, George NJ Reynolds asked
that the convention reject the propo-