Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-10-18

man nature Is not changed by high
position in the financial world.
MIR. LincOin's axiom that God
never tnndc man good enough
10 DC Intrustcd with unlimited
power over another man, may he
supplemented with the suggestion
that no four, or sih. or Gig Int men
are strong ana pure enough to
he Entrusted with unlimited pow
ar over the finances of great
country without direct RESPONSE
blllty and accounting for their
acts to the public nomc other
potent and Intelligent authority.
Power To FIX money rates. for all,
or nearly NIL, OF the banks In
New York City, and to change
them daily, iS IL grip on the hcnT
OF our commerce."
1T permits such intcrfercnccs as
fallible human judgment, within or In
and orderly movements OF money. the
life blood OF business. Many or us
complain bitterly when we fear that
he h tw1 houses Of conErsss; state
illustrators. acting in the open, and
after debate and public hearings.
have interfercd with natural laws Of
and speakers who advocate such In
references and regard them as pub
lie enemies. Yet the matter of nrhi-
money center, possibly reversing the
natural and healthy flow and affect
ing, directly or Indirectly. billions OF
dollars OF security values and other
Ing number OF private citizens with
out official responsibility, deciding in
Il moment and in secret.
temotest Sections Affected.
The evils and dangers OF such
methods could be recited indefinitely.
They reach TO the remotest corners of
touch harmfully every class OF pco-
pie. The direct tendency il to re-
verse one of the fundamental pur-
poses OF tho Federal reserve act.
which is TO promote orderly distribu-'
ton of money through the country to
meet the needs of commerce and ag-
riculture. Excessive interest rates
offered in New York art!ficially draw
money away from outside communi-
ties through their banks, and often
leave legitimate enterprises starved
movements which may be adding
nothing to real Industrial or com
mercial wealth.
one 81 rsiie err e., the statement previ-
on call money. arbitrarily fixed and
tolerated in New York. in my opinion.
have been Il potent influence in de-
pressing seriously the prices OF all
Investment bonds and standard shares.
The shrinkage in which In the past
Twelve months has amounted. inc'ud-
ing the depreciation in Liberty bonds
90 several billion dollars.
i II is no part OF the function OF a
government official to moralizc on
speculative operations. My attention
Is demanded when such operations
produce conditions retarding tho de-
vclopment of the country and en-
dangering the stability OF it's bust
ness. Corporations, individuals and
investors generally are drawn away
from legitimate Investments in new
entcrpriSes and in the shares and
bonds Of existing enterprises by the
prospect of 10 per cent to 90 per cen,
interest.
THE effect Of these rates IL seen
when the general managers OF exc
cut!ves OF railroads or other large
corporations visit New York to raise
money necessary for the redemption
OF retiring loans or for the extension
and promotion Of new business. The
bankers and bond houses soicmniy
point to the high rates paid for call
money, and corporations whose
credit abundant!y Justified 3 per
cent or per cent interest basis, have
been forced to pay per cent or s
per cent or 10 per cont on loans for
one year, three years or five TO ten
years; and are sometimes persuaded
by the bankers through whom thoy
obtain the funds that they arc doing
wei to get money even on such terms.
| because money on call has been ad-
vanced often artifcially to IL pcr
cent or 10 per cent or 20 per cent, for
| few days mt time.
The soDhistical argument that a
high rate for call loans is a justiGca-
ton for long time loan at ner cent.
| 10 per cent or IL per cent by strong