The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-16

fairs.
Special Despatch to THE NEW YORK IIEaALB
WAsHINGToN, Dec. 15.-The Commit
tee on Banking and Currency of tho
House. which has under consideration
the joint resolution passed by the Sem
ate calling upon the Secretary of the
Corporation, has given an opportunity
TO Secretary Houston to appear be-
fore it tomorrow TO explain the rea-
sons for his opposition to what plainly
is the wish of Congress.
There was no invitation issued to
Mr.. Houston. In fact the decision to
notify him that the committee would
be pleased to hear him, if he wanted
TO be heard, was reached after n dis
cussion that at times was stormy and
marked by considerable acrimony. II
ended in Representative Louis L. Nc
Fadden, chairman of the committee.
telephoning TO the Secretary's office.
He was informed that he would be I'M
sbiO W SCI III IOdNli WIN tiiC tocNiO
tary this afternoon, whereupon the
committees message was left with one
of Mr.. Houstons subordinates.
There is no doubt that the resolution
will be reported favorably by the COM
mittee. probably tomorrow afternoon.
regardless of whether Mr.. Houston APP
pears or not and despite his opposition.
If enacted into law the resolution will
become direct mandate TO the Secre-
tary to renew the operation of the War
Finance Corporation. which he has been
able to suspend because of the provision
OF the original measure that placed in
him authority TO approve all loans made
by the corporation.
Mr. Houston has withheld this ap-
proval, despite urgent need for financial
relief for small banks throughout the
country since last May on the ground
that while the country is technically Mt
war the corporation has functioned as
long as Congress intended 1t should ct
the time of its origin.
There is what practically amounts TO
unanimous sentiment in the Senate for
revival of the corporation. The mem
bers regard ii as the most expeditions
means of extending relief to the cotton,
wheat, tobacco and wool growers of the
country and for the establishment of
rural credits. Most of them expressed
Indifference with regard to Secretary
Houston's views. Others placed directly
on his shoulders responsibility for the
failure of scores of small banks through
out the country during the last few
months.
Mr.. Houston will not face sympa-
thetic committee il he does take advan-
tage of the opportunity to present his
views Some members hold the opinion
that IL was not even incumbent upon the
committee to hear what he had to say
because of his "contemptuous attitude"
toward Congress
1.-THE failure of a lot of small banks in
my community is due solely to the policy
of the Secretary of the Treasury, and
why this committee should bother with
him is more than | can understand"
said an old member from Southern
district.
when does the committee intend to
call the Japanese Ambassador on this
natter" sarcastically demanded Repre-
sentative Wingo (Ark).
Another member expressed doubt as to
whether he could be even courteous to
the Secretary If he did appear.
Representative Phelan (Mass.) said
he would be glad to hear what the
Secretary had to say in opposition 10
the proposal whereupon Representative
Wingo remarked:
"I'll bet a dinner for this committee
that IL he does come all we Will hear
will be word for word what has APP
peared in formal statements to the news
papers and speeches by the Secretary.
He's been trying his case in the news
papers
Reestablishment Of the War Finance
Corporati ton as a functionig agent is re-
garded as imperative in order to relieve
the money congestion incident to
falling market on many products IL
would enable the Issuance of billion
dollars worth of debentures, which, IL
absorbed by the investment bankers,
would provide funds necessary for the
release of millions OF dollars worth OF
products now being held and for which
there Is no market.
In other words, II would start the ball
rolling. Producers could release cotton.
grain, wool. &C., with the knowledge
that when they liquidated their existing
obligations to the banks they could be
assured of further extensions for new
operstions The committee believes that
II the billion dollars of debentures of the
War Finance Corporation are absorbed
nv the investment bankers and the
funds distributed where they will do the
most good u credit expansion or ten
times that amount will result.
There is approximately s6e.00O.000
worth OF blue" cotton now stored In
Southern warehouses and hypothecated
as security for loans. Liquidation OF
these from receipts possible only before
a further decline It is estimated would
result in a credit expansion for those
concerned in this industry of perhaps
s3oO 900 600. II some such provision
81 not made the committee feels
further declining market will follow and
the banks that have advanced loans and
are unable to recover Will smash.
TT is not the cotton grower who Is
most worried or that am most con-
cerned about in this situation" Repre-
sentative Steagall (Ala.) told his col
leagues ''He has got n little land,
horse and COW and a still back In
the bushes where he can go and drink
and forge; about II all. Soon he VIII
sell his cotton for whatever he can get
and let the other fellow worry. The
man In my community who Is going TO
bed at night with gun beside him and
a telephone connection with the under
takcr rs the small banker. and unless he
gets relief inside of sixty days he will
smash
"If the Secretary Of the Treasury
wanted TO he could extend this relief
In ten minutes March ( next may he
too late. But the psychological effect 81
immediate credit expansion among these
MANILA would ha frcn1audpua upor tho