The Washington times., 1920-10-13
.RESERE BANKERS
IN NWE|GHTYC0NF ABB
Governors Of All Districts Here
to Discuss Credit Problems
With Secretary Houston.


cotton and wheat producers. and other
groups now clamoring for Federal
aid. to enable them to carry over
harvested crops. was the major prob
lem dealt with today when the fall
meeting OF the governors of all Fed
Treasury. Practically every large
producing group had on fle its urgent
demands upon the Federal Reserve
Board that that body lift the credit
bars high enough to stavs on losses
totalling several billion dollars, which
otherwise might be sustained In the
process of the present normal price
adjustment.
Warnings In the cotton and wheat
belts, with threats OF reprisals In one
form or another to keep the prices
of these staples to near tho war level.
gave to this conference of tho leading
financers an Importance that has not
attached to any previous session since
the armistice. Upon the decisions
reached hinge the economic welfare
Of the whole country. As Governor
Harding OF the reserve board as
sembled the governors and reserve
chairmen In executive session. II be-
came apparent that the policies Of the
Federal Reserve system are on trial.
and at q crisis. when hasty decisions
might easily provoke gravest dangers
financially.
The reserve board directors, a. they
wrestled with their problems. among
them the possibility that advances
in the rediscount rates at certain Fed
eral Reserve Bank centers may be
a. - ~.yt n
secrecy.
Goveronr Harding, Secretary Of the
Treasury Houston and Comptroller
of the Currency Williams were pre-
pared staunchly to defend the Gov
ernment's restrictive policy on credit
extensions. especially upon loans by
member banks that would have the
effect of holding back from market
unusual amounts Of harvested crops.
1t was apparent that the large pro-
ducinE groups are doomed to disap-
pointment in the hope that the Fed
eral Reserve System can be employed
tive purposes.
The view that the banks have
credit enough to meet all legitimate
needs, but no surplus for speculation,
was generally voiced by the nnan-
cisrs. Even in the face OF the enor-
nous and unprecedented demand for
commercial credits, II was said. the
reserves of the banks have held fair
Iy steady, but there 10 not enough
credit to foster profiteering.
Latest records presented showed
that there has not actually been a
con struction of credit. but that since
the crop movement began there mas
been an upward movement OF credit
expansion.
Loans and Investments of banks
have increased approximately e1.750.-
Oo0, 900 in the twelve months up to
September /, according to returns
made by 500 reporting member banks.
From the time increases in discount
rates went into effect last January
the loans Of the reporting banks, 1t
was reported, exclusive of loans Sc
cured by Government obligations and
other stocks and bonds. increased
fully &1,260,000, 900.
The conference thus was informed
that this reflected q total increase Of
commercial loans in all banks OF
about $4,000, 900, 900.
At the Federal Reserve Board today
II was learned that no change prob
ably will be recommended by the con-
ference in the boards present policy
with respect to so-called essential
loans. Both Governor Harding and
Secretary Houston are heartily In ac-
cord upon this position.
The prime consideration OF the
board, indorsed by the conferees now
here, is that legitimate enterprise
shall be FIRST considered by bankers,
and that speculative enterprises be
discouraged.
Reserve bank governors participant
ing In the conference are: Charles A.
Morss, Boston; Benjamin Strong. jr..
New York; George w. Norris, Phila-
delphia; f.. r. Fancher, Cleveland;
George ]. Seay, Richmond; M. b.
weIlborn. Atlanta: j. r.. McDougal,
Chicago; d. c. Diggs, St Louis: X. A.
Young. Minneapolis; J. T. Miller, jr..
Kansas City; r. l.. Van Zandt, Dallas,
and ]. U. Calkins. San Francisco