New-York tribune., 1920-12-03
u. S. Banks Get
15OP.C. Profit.
Owen Charges
Senator Calls on Gov. Hard.
ing of Reserve System to
Cut the Discount Ra,es
OF Regional Institutions
favors Dehation Plan
Approves Ban on SpecuIa-
ton, but Holds Legitimate
Business Is Being Stopped
F.-on1 IL. rrtb,1ne,. 1rnshsza.a.

rom 1'- T'ionne's Washington Buren,.
HNHiNGION, Dec. 2.-The Federal
Reserve hanks Of the country are earn
.Hs 100 per cent year on their capital.
senator Robert l.. Owen. OF Oklahoma
one o. the cnlef sponsors o. the Fed
''al reserve system, declared TODAY
~ letter IN which ne called on Gov
rrhor harding of the Federal Reserv.
noarN 10 cut discount rates of the
regional banks in the interest of =
more orderly dehation. Senator Owen
protested against what he called "in-
discrlmlnate defation' and assertad
the hign earnings Of the reserve banks
put the government in the "position
Of protiteering.'
= Necessity for the strong hand of the
Federa Reserve BOARD in cherk,,',s
speculation and IN directing c,pdi,
ch"nns!S 10 The greatest good Of u-c-
eNsltieS>ls ~duali,e.: aud ccr..l,i,,, "a
proved hN senator owen, uOI lna uoljc..
o. the board lii raising rates OF inte,-
fS' Ior the putpo>e OF "DroAJl, d~t,at
'"e CieHi's IS criticized, as making
Nuch ni&h rates throughout the country
As 20 De r"spons lhie for. in som. casa.
absolutely stopping legitimate nroduc
uon and legitimate distribution" which
ne calls the evil OF usury."
senator Oven refers to the aenyas
SION OF government bonds. while the
TOTAL resources of the banks of the
country. June 80. 1920, reached the
gigantic total OF $53 .O79 los 600 md
ne admits his distress at the nrona
ganda beng carried on to impress the
country with the idea that the Federal
reserve banks were in condition of
instahilty.' '''''
No Alarm for Banks
senator Owen declared that "the
TAX of tho Reserve banks BEING
alarmed. under the circums stances. Is
stupid"
S Senator Ovens letter follows. in
part; !"
y ~lsh 70 again apneal to you and
20 the Fedora Reserve Roard to lower
the rates Il l0teres, CHARGED hr N.
Federal Reserve banks. and oxnand tno
oans Of the Federal Reserve banks 10
the eNtsn' which may he required for
purposes Of legitimate production and
distribution.
"American banks are justified -
charging and per cent. hecans.
tne} pay and 3 pen cent for DE-
poslts, and they arr entitled to MAKE
Il profit oi and 3 per cent aho.e
inelr overhead charges on the acuosiie
Wnlcn 'HrN handle merchants Of
credit
The Federal Reserve banks earned
last year over 100 per cent. and are
earning now at the rate in excess Of
lao per cent per arnrm on their caDi-
VAL conf trafF TO sound public pol
icy. This excess profit is all the more
reNre hensihlc because it goes IN tho
T TrNasury. Is made by a governmental
lnS'rnmentalty and puts tho govern
mont IN the position Of rrofiteerlrc
aNd setting national bad cysmplo.
"Tha Federal Eesnrva banks urdsr
those high interest rates arc nnsasl~-
ab : de-sfsNii'7ing credits and rron,c,-
ing industrial depression under tho ar
hitNa'y high interest rates which the
Reserve banks ~re charging.
81 fullY agreo with tho board in ia
policy Of advising restrictions Of loans
employed in stock sDrculations. in con,-
modify speculations. IN boarding and
N proiteoring
"h seems 10 n the policy of tho
board to raise The rates cf interest fos
the purpose Of broadly Debating cred
It's It has be"n pursuing this policy
for yoar. with tho result of this pol
icy II high interest charges being ov-
tended goncrall, throughout the cour-
~. which has thus brought on cor