Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1920-12-16
HOW OFFICIALSOF |
U.S.. VIEW REVIVAL
OF FINANCE BOARD
BY DAVID LAWRENCE
Neased Wire Service 10 Tie Journat.)
COpyright 192O,)

NNNs'J 'eshNf A"So'|
WASHINGTON, Dec. 14.--Congress
would raise false hopes by the pas
sage of resolut ;ons promising finan-
cial relief to the fatmer, in the opin-
branch of the Cove nment. The sem
ate has just passed resolution di-
recting the secretary of the treasury
to revive the war finance corpora
ton and expressing to the federal
reserve board the cp. MON that liberal
credits should be extended the farm
ers of the co"ntry.
This action CT the senate probably
will be followed by favorable vote
in the house and then congress will
have discharged its obligation to the
farmers who have been clamoring for
help as prices declined. But the
truth is the resolution will be prac-
tic"lly ignored and will not aid the
situation and the farmer who relies
on it is apt to be in a worse situa-
ton than the one who doesn't
Investigation at the executive end
of the government reveals the fact,
for instance, that Governor Harding,
of the federal reserve board, will
opinion expressed in the senate reso-
luton as mandatory. If congress
wants anything done, it must direct
the federal reserve board to do it
by amending the federal reserve act.
AMI If it does that. it would not
be surprising to see the federal re-
serve board go to pieces, altogether
by the prompt designations of sew
erai of its members. Either the fed
eral reserve board will act for the
best interests of the country, accord
Ing to its best banking judgment, or
the federal reserve system will be-
come the football Of congressional
politics.
View Of Situation
That's the critical view of the sit
uation as it has developed in execu-
tive quarters in the last few days
Some inkling of the seriousness with
which members of the federal reserve
board regarded the invasion of their
prerogatives, reached the senate yes
terday for the proposal to limit the
discount rate to per cent was voted
down after it was learned what a
mischievous effect the action might
have had on the entire banking str
uatlon.
So far as the federal reserve board
is concerned, the teeth were taken
out of the resolution, when the pro-
posal was changed from "direc-
ton" to the expression of an opin-.
ion. Governor Harding has indicated
in his testimony before congress
exactly how he views the proposal
to extend further credits to the agri-
cultural interests and the action of
the senate has not changed his mind.
Mr.: Harding is to, be governor of
the federal reserve board until Au-
gust, 1922, and though he comes
from the south, which has been in
sistent that cotton growers be pro-
tected by the extension of credits,
he is acting Independently Of any
political influence in the matter. The
fact that Sanafnr Garfnr Glass nf
Virginia, a Democrat. and former
secretary OF the treasury, as we'll
as Senator George Mclean, Repub-
lican, chairman of the senate COM
mittee on banking and currency, Wig
orously opposed the action of the
character of the opposition to the
Gronna-Norris proposal.
Officials fear that for a day or two
the market might hold UP as relief is
promised by congress, but that when
those who, are holding their goods
finally find out that they can't ex-
pect financial aid, the bottom will
drop still further and the revulsion
feeling will be even greater
against those who raised false hopes.
Chance of Veto
AS for the secretary of the treas
ury and the war finance corporation,
the direction of congress that it be
revived Will De Heeueu IL TIE ISSolu-
ton passes both houses. There is,
of course, chance that presiden-
tial vote may be interposed, as Mr..
Houston's word with President Will
son is very potent. However, even
If the resolution should become law
over a veto, the chance for relief still
is dependent uopn the personnel of
the war finance corporation the mem
bers of which are selected by the
president.
There arc four members of the
board besides the secretary Of the
treasury and at present there are
two vacancies. Surprising Mr.. Will
son appointed two Democrats, would
the senate confirm them for four
year terms, Or would the senate feel
that Warren Harding ought to have
the chance to name these new men,
bers?
Delay would, of course, nullify the
purpose of the resolution, as 1t seems
to be the universal opinion in eX-
ecutive quarters that the present
emergency will come to an end after
New Years. Moreover, the regula-
lions of the war finance corporation
are made by the corporation itself.
1t can demand all sorts of security
and practically decline to extend aid
except as it pleases.
Furthermore, the secretary OF the
treasury would be obliged to go into
the open market and borrow money
to. give to the war finance corpora
ton.
1t is being whispered about the
capitol that some of the men who
voted for the resolution did not ex-
pect anything to come of their &C
tion. but feared to antagonize the
farmers back home.