Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1920-08-22

| S$sS-1-s-3 Eight months
R-E. OVEN " ago, having heard
the Federal Reserve Board contem-
plated raising the rate of interest on
the Reserve Banks, | enter a protest
against it on the ground that it would
have the effect of raising the rates of
interest of all bank loans, municipal
loans, farm loans and private loans
throughout the United States, and
thereby greatly increase the cost of
living; would slow up production and
distribution, and bring about period
of industrial depression.
"My appeal was in vain. The pol
icy was adopted by the Board of
raising the rates and advising the
banks of the country to 'deflate'
credits.
"Under this policy the confidence
of the country has been shaken, a
period of depression has taken place
in some parts of the country, and is
threatened in all parts of the coun-
try. On the floor of the Senate have
made a number of speeches against
this policy, and have put in the Con-
gressional Record several letters ad-
dressed to the President of the Unit
ed States, showing why this policy
was harmful
1.-The argument of the Reserve
Board is that credits have been undu
ly expanded by people specializing in
stocks, by people buying commodities
for boarding.
This has a measure of truth, but
fO,. e1,ab oh 1TCac of ornAif
should be applied individually by the
banks, reqRiring large margins for
those specializing in stocks and re-
curing gradual liquidation. The same
should be a remedy for those buying
for monopoly of commodities and
profiteering. As rule, the profiteers
are not profiteering on credit, but on
their own resources. To raise the
rates of interest and to demand gen.
eral deflation is not remedy that
should be applied. 1t is a gross wrong
to apply such treatment to legitimate
business engaging in actual produc-
ton and distribution when the world
is in such urgent need of increased
production. If, for example, oil men
engaged in production are denied
credit for production, it diminishes
production under the laws of supply
and demand, and will not lower the
price of oil. 1t will increase it.
"Of course, the producer in ex-
IRENE might temporarily sell his prod
uct at a sacrifice to save himself
from bankruptcy, but in the long run
The policy is false as a means of re-
ducing the price of commodity.
The true way to lower the price of
commodities is to stimulate produc-
ton, and by increasing the produc-
ton the price under laws of supply
and demand will be automatically
| reduced.
"The effect of the policy of the
Board is shown in breaking down the
price or the market value of all sorts
of securities, especially industrial Sc
curities, and not even excepting gov
eminent bonds.
Municipalities cannot now sell
their bonds advantageously, and the
owners of Liberty bonds face a loss
of the best security in the world of
from to 5 per cent, due to the de-
struction of credit by this policy.
"The normal rates of interest in
Europe for so years before the war
were, where they do not pay inter
est on deposits, from to per cent,
as in Belgium, France and England
In America where they do pay in
terest on deposits of from to per
cent, the normal rate of interest
has been from to per cent
"Under the unwise policy of the
/ ID pAorI 81 6
the best quality is selling for and 9
per cent, and in reality many business
men, whose credits are really good,
are paying from 10 to Is per cent
for money through various devices
such as commissions and discounts,
etc. This raises the cost of commod-
tiles necessarily and increases the
cost of living.
"The Federal Reserve Act was
framed by the best opinion of Ann
erica for the purpose of giving sta
bility to the credit system of Ameri-
ca, and giving a reasonable and stable
rate of interest. The power of the
credit system in the hands of the Re-
serve Banks is enormous and is now
being employed, not for the purpose
of stabilizing credits, but for the as
/ founding purpose of debating credits
breaking down confidence, and it is
bringing on an industrial depression
that may be extremely harmful unless
promptly checked.
1.-THE banks canot be relied upon
to take the initiative because they
are under the dominance of the Re-
serve banks and the Reserve Board,
and they would put themselves in
jeopardy il they should dare to assail
the policy of the Reserve Board.
NThe chambers of commerce are