Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-05-25
HARDING D
WAY 7 ! ! ! I|Ol)BTA D | / 4 /!
!. LOWER | r PRICES '|!| !! J
]! Individual &! Economy Given
AS First Step Toward 4
t.@ Reduction. .s.s
DECLARES NEEDLESS
CREDIT ] IS ADVANCED 4 N Ct! 9
'..4... : .. 4
Increased II Transpo ation
a z Facilities Strongly d,
4 q. Urged: Il

washington, May a5.-Eeonomy in
Individual. expenditures, reduction Of
non essential loans by banks, in
creased production and improved
transportation are needed to reduce
the cost Of Lying and debate credits.
Governor Harding of the federal re-
serve board declared today IN re-
spending to a senate resolution Of
inquiry. .&s
The board is not prepared to define
what are essential and non essential
loans, Governor Harding stated. This,
he said. Is a problem for local bankers
familiar with local needs &is ~g.s
Governor Harding's letter. pre-
sented to- the senate today by Vice
President Marshall, came in response
to the resolution of Senator McCor-
mick Republican. Illinois, sadopted
recently, requesting information re-
gArding what steps the board con-
templated Ito meet the, existing in
fiation of currency and credits and
consequent high prices" and what
| measures we're proposed to mobilize
credits for movement of the 1920
crop.
Too Much Credit.
Reviewing the boards warnings to
federal reserve members against ex-
tending credits and it's increase of dis
count rates, Governor Harding said
the board for months has recognized
that the expansion Of bank credits
= was proceeding at rate not
warranted by the production and con-
sumption of goods" The discount
rate advances Governor Harding said
have checked credit transactions
somewhat but have not been entirely
effective in bringing about the ,reduc-
ton In loans desired and which might
normally have been expected during
the early months of the, year..
"On the, contrary" he said, "com-
tmercfal loans haye steadily, increased
Thus, 1t appears that the public has
anticipated demands for banking
credit which are usually made later
!'on in the year.
!, The average reserves of federal re-
serve banks are now a little over AZ u
pr cent" he. added, "as against as
per cent at the beginning Of the year
and about 81 per- cent twelve monhs
ago." ~ ,.fsa
Need Transportation.
Governor Harding told of the recen,
conference here of the federal reserve
/ advisory council and its rec1Inmenda.
ueps Tor curtailment of credits, TO,
herieRtth- thu. opiE conngas,
ton Of traIisp tion SfaGi3ifAs ii
tying up great quantities Of foodstuffs
"a "The@boardfis is convinced" Governor
Harding continued, that II the .unsold
portions of last years CROP can be
fAfought to- market before the new
cop natures, the liquidation OF
4 credits which are now tied up / in
! CARRYING the old crops will be suf
/ f1cient to Offset to a considerable de.
gree the credit demands I" III
moving the crops of 1920"
r In the efforts to reduce nonressen.
/ tial sloans, Governor Harding saiG
! banks were cautioned against drastic
cqrtatlmentsl and advised to seel
gradual liquidation and to grant loan.
stimulating essential production.
l Traffic Congestions. =
Regarding congestion OF merchan.
disc and traffic, Governor Harding
said, 1-