The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-07

all banks It Is estimated or perhaps
three billions Of dollars.
Since the crop moving demands came
on, the bills discounted and purchased
by the Federal Reserve banks have tn
creased at the average rate OF nearly
twenty-five million a week. and the
Federal Reserve notes at the average
rate OF twenty millions a week The
increase In volume OF Federal Reserve
notes from January 23, 1920, to August
81. 1920, was $3So,0o0. 900.
referring to the suggestion that the
Treasury at this time deposit money in
banks in certain sections of the country
In order to ease the credit situation.
can only say that this is not feasible.
The Treasury has no money to deposit
for such q purpose, and could in no
event make deposit IN the circumstances
except TO meet Government require
monts.
las matter of fact the Treasury Ii
itself borrowing money at n cost soine-
what in excess of Q per cent 20 meet
current bills. The Treasury has not
control over appropriations and must
meet the bills that are presented under
the law.
THE Treasury should not be in the
banking business. The banks OF the
country under existing law can and Will,
believe. meet the situation. az far as 1t
can be met, to the satisfaction CT the
mass of the people
1T may be interesting 10 you to know
that the rediscounts for Federal reserve
banks in crop moving sections with sew
eral of the reserve banks n otncr Sec
tons OF the country at present arc about
;ix times the amount formerly deposited
by the Secretary ri the Treasury In
banks In crop no, ing seasons to assist
in the marketing of crops.
The other suggestion that the ACTIVE
ties of the War Finance Corporation,
which were suspended last spring. be
resumed and that 1t indicates a willing
ness to iUnd money to corporations or
persons desiring to finance exports. is
likewise unacceptable. The War Finance
Corporation was a war agency. SO far
as the financing of exports Is concerned.
the provision authorizing II was passed
at time when there was apprehension,
caused by the chaotic conditions after
the armistice, that exports might not
go forward. AS a matter Of fact, exports
Rave Como forward in unprecedented
volume.
while in 1918, the last year Of the
war, the exports aggregated $4,000, o00,-
900. in 1919 they were valued at $4,000
100000, and In this year 1920, on the
basis of the first seven months, they
are going forward at the rate Of $4,000
100000. Clearly exports are being H.
nanced. They are being financed by
private business agencies, as they should
be. The aggregate value Of exports for
these three years will greatly exceed the
value Of imports. perhaps. by more than
$4,000. 100000.
Reserve Board Circumscribed.
THE officers of the Federal Reserve,
Board have pointed out facts which
many people overlook. namely, that the
Federal Reserve Board has no discre-
ton in the matter OF loans which
member or non-mernber bank may wish
to make or decline; that the Federal
Reserve Board has no lending power
and also that Federal Reserve Bank
has no discretion in the matter OF
loan which member or non-member
bank may wish to make or decline. The
Federal Reserve Board and the Federal
Reserve banks are concerned with the
keeping OF the assets OF the Reserve
banks in sound condition and in having
large mass of liquid paper so that
when urgent needs arise there may be
reserves with which to meet them.
IT need not say to you that after all.
the supply OF wealth at any one time Is
limited and that necessarily credit extern
sions cannon be infinite or always be had
on terms ~ tisfactory to every individ-
uaI We are stili in the midst OF abnor-
NAL conditions"