Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1920-08-22


arly the victims of this abusive power,
and they can create public sentiment
by making a demand for a change |
of this policy.
81 therefore believe it would be
wise to pass resolution urging the
Federal Reserve Board to restore the
interest rates which were In exist
ence before the war, and certainly
to lower the rates to what they were
during the war and to discontinue
the policy of a general deflation of
credits.
Banks extend a loan of $4,000
to a citizen. The bank takes proper
security, puts the note for $4,000
in the bills receivable account as an
asset, and then they deposit it to the
credit of the citizen in the liability
account. The bank demands the pay
ment. The citizen sells his security or
commodity for deposit in the bank,
pays his note and cancels $40, 900
of deposits. Thus the credit is retired.
The bank charges interest on the note
for payment for giving the citizen
bank credit in exchange for private
credit to the extent the banks compel
liquidation, then compels the retire.
ment of the derosit. This has taken
place on a large scale recently
Many banks show a serious loss in de-
posts because of the action of their
own bank or of other banks in de-
flating credits. The transaction is
simple.
There is no sense whatever in re-
l. Ay--INvaI ~
production and distribution process
es. This is to check business and to
stop these processes just to the extent
such policy is carried out.
he banks are thoroughly justi-
f; d in giving preference to those en-
LACED in production, over those en-
gagged in mere speculation, but there
is no justification whatever in deny
ing the productive processes the cred
it essential to carry on the business
of the country. To do this necessarily
brings on an industrial depression.
If this is being done with a design of
stopping the business enterprises of
the country and making labor walk
the streets unemployed, as means of
teaching labor a lesson" it may
carry mischievous consequences Of a
still more serious character. 1t is of
urgent Importance that all the peo-
pie of the United States should con-
stantly be employed, and to cause
men to be thrown out of employment
as means Of improving the condi-
lions of the country is not wise
remedy for the abuses which may be
charged against labor in exacting too
high rates for service rendered it.
There are other remedies, which do
not lie in the hands of the Federal
Reserve Board
Deflation
"Deflation carries with it the i'm
plication that there is an initiation of
credit. This implication is false.
Initiation means the extension of
credit which is unsound. The extension
of credit for production and distribu-
ton to the extent of the business re
quirements Of the country is not un
sound, and the pl emise upon which
the theory f deflation is placed being
false, the conclusion expressed in the
word Geflation must fall
at is true that the United States
expanded its credit for war-making
purposes to the extent of billions but
it was not subject to reproach. 1t was
justified expansion, and these credits
extended to the government by indi-
viduals for the purpose of preserving
the life of the nation cannot be treat
ed as inflated credits deserving de-
flation. To deflate the credit extend
ed to the government by the inIivid-
ual can only be properly accomplish
ed by payment of the debt, and this
payment is more advantageouslyI
extended over many years time than
to demand immediate liquidation. To
deflate the credits extended to the
government by the individual means
that the individual should de-
mand of the government immediate
payment, and this is not the contract
Moreover, to discredit the govern
ment bonds by using a government
instrumentality such as the Federal
Reserve Board is to do great wrong
to patriotic citizens who extended
these credits. These bonds have been
brought down from par 10 or Is per
cent by the unwise policy of raising
the rates of interest broadly under
this policy of the board. | think,
therefore, that the policy of defla-
ton is based on a false conception
and is already having effect so harm
full that any citizen of average intel