The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1920-02-27
URGES LOANS TO |
CHECK INITIATION |
f. A. Vanderlip Attacks
the Federal Reserve
System.
SAYS POLITICS WEAKEN
Financier Asserts Treasury
Has Failed to Put Brake
on Credit.

NEW YORK, Feb. 20 --- Cam
p4lgu managers engaged In pre-
ul~lug party platforms ehould give
serious consideration to the ques
.1u ~ eliminating politics from the
spIrral reserve banking system, said
prank A. Nanderlip, former presl-
dom. uf the National city bank. In a
discussion at the republican club.
Nr. Nanderlip, who spoke on
uur Foreign Commerce and Inter
Hauonal Banking" said the federal
reserve system opened the door 20
hc initiation OF the country's credit
and asserted that the brake"
lsiiust initiation provided for In the
tu' had not been used because of
political considerations
J. was provided, he said. that
vhou danger OF Initiation occurred
q. ,rs for borrowing could be raised.
instead of acting on this authority
granted It, the treasury he said,
Kept rates low and opened tho door
.o great expansion, The treasury.
hr said, took a cir9um scribed view
NJ he financial sithation. keeping
-i'es low for The purpose OF en-
ahiug the government to borrow al
an 8dvantagC but that IL failed 10
Understand the consequences OF
such "A policy.
because OF initiation. continued
Mr. Nanderlip, prices eince 1914
have shown an advance of 23i per
cent, with the result that the dollar
will purchase but 43 cents worth Of
it's value in 1914. While wealth has
been taken from the people, IL has
been scattered with a broad hand
20 tho spectators and - me peo-
pfo who owned money
Calls Reserve Management Weak.
IN che war period the currency
mad increased 6S per cent while the
deposits in commercial banks in
creased 1903 per cent, but there was
no substantial increase in produc-
tion.
The weakness OF the federal re-
serve banking system, said Mr.. Van
dcrlip I'm summing up the result Of
'hc first five years Of It's operation.
naS been in its management He
declared that political Influence had
been injected into the system 'at
The top In this connection he
pointed out that the secretary of the
treasury was head of the federal
reserve system and that the comp
ROLLER of the currency was ox-
officio a member of the bank
Mr. Vanderlip predicted that the
financial system of the country
could be brought down graually to
a normal basis without a crash and
that money would be forthcoming
10 aid Europe. il certain things
wore done.
"Iu The present state OF our ex-
pended credit it will pc difficult to
grant great foreign credit he said.
1T could be done if we changed our
thriftleSS habits, II we stopped our
oNtravagant expenditures and rec
Ogui2ed the great duty and pbliga-
lion that we have as nation to
the rest Of the world.
IF that If done we can get capital
'ogether to start Europe TO work
quickly. II will be possible for us
20 get down from This dangerous
altitude without "a crash. but the
'cndency is to 20 up. Every week
means further increases In -xpan-
SION of our credit system.
Must Stop Speculation.
II we have the courage TO stop
this era of speculation to halt these
eXtravagant expenditures, we will be
able to step down without a crash.
II will be somewhat painful, but It
must be done, and can be done by
entering on a period Of conserva-
ton
J"Our fate lies largely in the hands
N the federal reserve board and the
Ncis.on of that body. Heretofore
heir decisions have been directed
between the political voice and
banking Judgment. The campaign
managers now at work ought TO
consider whether we should not
have removal OF politics from the
federal reserve banking system"