The Manning times. [volume] (Manning, Clarendon County, S.C.) 1884-current, 1920-10-20
RESERVE BANKS FAVORS
Farmers SAYS GOVERNOR
Loans for Agricultural Purposes Are
Continually Expanding, Declares
Banker of Richmond
mo ROOM FOR CRITICISM"
South Treated More Literally Than
Any Other Part of Country Ac-
cording to Member of Board

Greenville, S. c., Oct. 19.-Despite
reports there has been no curtailment
of the amount of bank credits out
!, standing, but, on the contrary, there
has been a continuous expansion, not
only of commercial loans among the
banks of the federal reserve system,
but of loans for agricultural pur-
poses, according to an address Of
George j. Seay, governor of the Rich
mond Federal Reserve Bank, read be-
fore the South Carolina Cotton Manu-
facturers' Association here today. The
paper was read by Charles A. People,
deputy governor of the bank, in the
absence Of Mr.. Seay.
"No section of the country has been
SO literally treated in The matter of
extended credits as has been the
South" Mr.. People said, "and yet in
that section of the country we hear
the loudes complaints and the most
conspicuous. Perhaps she is suffering
most at the moment. Whatever COM
plant she may have, she cannot COM
plain of curtailment of credit, and she
has, in fact, been treated more liber-
ally than any other part OF the coun-
try, and capital has been drawn from
other parts to lend her."
Mr.. People, representing Governor
Seay, quoted freely from statement
recently prepared by Governor Seay
answering vigorously and in detail
current criticisms of the federal re-
serve banks. The criticisms discussed
married in Mr.. Peoples address to-
day:
tFirst, That there has been such q
marked curtailment of bank credit in
paign in restraint of trade. The truth
is, however, that there has been an
almost reckless expansion in bank
credit during this period, and that the
volume of both agricultural and COM
mercial loans has continuously in
creased. Moreover, on June 30 last
the funds of the member banks loaned
aad invested were actually $4,000, ,O00,-
600 more than their own resources
available for such purposes. Two
things made this great expansion pos
sible, namely, the concentration of re-
serves in, and the note issuing power
Of the federal reserve banks.
"Second. 1t is charged that the
South particularly has suffered at the
hands of the federal reserve banks.
On the contrary, no section of the
country has been dealt with as lib
orally as the South; the three reserve
banks of Richmond, Atlanta and Dal-
las have been able by exhausting their
own resources and borrowing more
than $100,000,000 from other reserve
banks, to lend their members almost
three times their reserve deposits
"To speak specifically of South Caro-
lima, the member banks in this State
have borrowed continuously for the
past fifteen months cwice their
equitable share from the Federal Re-
serve Bank of Richmond
"Third. 1t is said the Federal Re
serve Board has soughi to dominate
the banks Of the country. In answer
/ emphasize that six Of the nine di-
rectors Of each federal reserve bank
are elected by the member banks and
are representative, successful, active
men of affairs, constantly in intimate
touch with the business conditions Of
the district; that the Federal Reserve
Board has had very little direct power
over the federal reserve banks and
mono over member banks in the
granting of credits; and, in fact, that
the reserve banks lend their member
banks less than Is per cent of their
total loans to their customers"
Pointing out that the federal reserve
banks had gone through successfully
period Of marked expansion, incident
to financing the government during
the war, and that they are now facing
the more difficult task Of return to
normal conditions, Mr.. People empha-
sized the need for clearer understand
ing of the facts in the case and for
mutual confidence on the part of the
bankers and business men generally.
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