Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-09-19
Judged BY It's Fruits


| Ql It's results, as reflected in the coun-
- try's business conditions. the Federal
reserve Board must be judged. If the pros
perily OF few months ago still abounds
II Factory wheels arc turning In an effort to
! increase production, il contractors are
rushing operations that homeless people
may be housed if agriculture is receiving
living profit for its labor and energetically
preparing for more bumper crops next sea
son: H. III brief, tho nations varied indus
tries arc growing and thriving, then II may
De accepted that the boards so-called della
ton policy, as set forth and defended by
Governor Seay, OF the Federal Reserve
Bank OF Richmond. in another column on
this page has been wisely couuselcd i'm its
inception and bcnenccnt in it's functioniug.
II, on the other hand, industry is all but
paralyZed. agriculture facing ruin, and
business near panic. tho responsibility must
req upon the board, for it is the country's
financial heart. which sends forth the finan-
clal currents 10 stimulate ii or withholds
those currents aud brings on stagnation and
disaster
Facts give the answer. From every sec
ton OF the country come cries Of distress
The South's cotton growers already have
sacrificed millions OF dollars in a market
squeeze from which their banks refuse to
rescue them. Its tobacco planters face a
bottomless market with no hope OF financial
ald 10 tide them over. It's peanut raisers
are III similar straits. Many OF the couu-
try's Industries are idle. its factories all
but siienced. II is the general condition as
Foiced by the press from every point OF
the compass. And by every industry the
condition is attributed to but one cause
the withholding OF reasonable and legili-
mate credit by the banks
But, in face OF these patent facts Mir
Seay contends that credit has not been
withheld, that it is going out in increased
volume, that there ara adequate funds for
ell legitimate purposes. and il demoralzed
conditions do exist. then the member banks.
and not the board, are to blame for with
holding credits. since. as he explains. de-
cisions as 10 Withholding or extending
credits are left to their discretion Possibly
the attitude OF the board has been msinter-
preted. Possibly, but not probably, the
member hanks. In an excess OF defation
zeal. have exceeded their Instructions Per-
maps the plight of the country is directly
attributable to 4 n,Srow-sighted policy on
the part OF its banks. as w. b. Yeary OF
the Agricultural Department of Texas, re-
Gently suggested. but no less an authority
than senator Owen, cO-author Of the Fed
tral reserve act. defending the banks, says
'h!S' ihey are so completely in the power
OF the Federal Reserve Board that they dare
not antagonizc its demands for fear that
theE would by doing commit suicide
There can be no question that these banks
are acting according 10 what they under
stand to be the explicit views OF the Fed
eral reserve Board in curtailng credit
wherever possible and thus breaking down
that prosperity which six months ago was
IN evidence everywhere throughout the
land"
Ire hoard may not have given those ''ex-
r!icit instructions" for the Withholding of
ty,ffnf
have very little direct power over the
granting OF bank credit" yet il has the
power 10 review and determine the dis
count rate. What more powerful weapon
10Y the dlctation OF credit could il desire?
Nilh this eapon over them, according 10
George Hampton. director of the Farmers
National Council farmers today are paving
AZ per cent for their money. In this con-
hection consider the statement of Senator
Owen, confirmed by the Comptroller of the
currency that the Federal reserve bank
members have loaned over s500,OO0On0
AT 10 per cent 10 80 per cent nearly
s6oo,o0o.O0o at per cent 10 Is per cent.
ana over S2500.000 900 at 10 per cent to
- per cent" In faco OF these figures IS
/, reasonable to believe that 1.-THE board has
II" direct power over the granting of bank
credit?
], Is this drastic increase in the discount
rates that has brought on the acute condi
lions OF which the country complains II
! Is thiS high cost Of credit that is killing
business ]uat as surely as the high discount
rate and the calling OF loans on Liberty
, bonds caused the sacrifice OF millions OF
dollars BY loyal investors who had faith in
| we government and purchased securities at
! the bchest of its banks
II The Federal Reserve Board ia sircero
In saying that it has not cut OF the credit
| supply that 1t is not responsible for the
| organized propaganda which has thrown
| the country into credit panic. and that
inc member banks are responsible for the
! s'rihSehcy, then IL can cure the situation
| ~lth WORD TO those banks Let IL indicote
It's approval of more reasonable credit
! policy, let II say that loans for legitimate
| purposes should be- made at rates tia, ara
| not u6urious. and the banks will be- ouick
| 10 respond Then prosperity will come
again II that word Is not said. then nros-
trate industry, a stricken South and dis
! contented people will be the only lo-ico,
fruits Of its Withholding
!
| we have fallen upon conditions in which
i seems altogether timely to invoke Tho
tririt OF tho oid-time "patarole" song.
Nun white