The herald and news. [volume] (Newberry S.C.) 1903-1937, 1920-10-05
RESERVE BANKS
BACK FARMERS
BYRNES PUBLISHES CORRE.
SPODENCE WITH HOUSTON.
Secretary Referred tc Treasury De,
partmert Net Banks-ln Ac-
co.d With Harding.
The State.


made public telegraphic correspond
ence with Secretary of the Treasury
Houston, which shows that the secre-
tary in his statement of last Nor
day referred only to the attitude OF
the treasury department and had no
reference to the policy Of the fed
eral reserve bank system in dis
counting the paper Of member banks.
The secretary advises Mr. Byrnes
that he is in accord with Governor
Harding's definition Of "orderly mar
keting" as meaning the marketing OF
the cotton crop gradually. The telc-
gram of Mr.. Byrnes to Secretary
Houston on September 26 reads as
follows:
Gall trade reports indicate your
statement construed as intention CT
federal reserve bank not to discount
notes secured by cotton. Satisfied this
not your policy. Statements Of Gov
ernor Harding in his Cleveland
speech defining orderly marketing
was reassuring to entire trade. II
YOU are in accord can you not issue
statement as to what you meant by
orderly marketing?' Any course
other than that outlined by Cover
nor Harding would result IN specula-
ton by mills and buyers at expense
of producers"
Reply Of Houston.
Secretary Houston's reply OF the
29th states:
ssMy statement is, I am in favor OF
, every legitimate effort to promote
the orderly marketing Of all COM
modities, but the government can not
be party to an undertaking to hold
commodities off the market to enable
the owners artifcially for specuia-
tive purposes to maintain war prices
or higher than war prices
Gin speaking Of the government, OF
course, was speaking particularly OF
the treasury. I was not speaking OF
the banks. They are not the govern
ment. My stat anent was induced by
request >of people that the treas
ury either deposit money in crop
moving sections CT that it revive the
war finance. corporation activities.
Either of these things would nece1-
state the treasury's borrowing more
money at the high rates at which 1t
is now borrowing to meet current OBJ
legations. 1t has no money to de-
posit except for government pur-
poses. The war finance corporation
would only assist in financing ex-'
ports. This power was given at
time when it was feared that ex-
ports would not go forward. Ex-
ports have increased steadily TO enor-
, NOUS proportions and are now run
lning at the rate Of over $S,o0O,oo0,-
900 for the year.
Could Not Borrow.
obviously the treasury would not
be warranted in borrowing money to
further stimulate exports cr to de-
post for lending purposes. The treas
ury should not be in the banking busi-
ness. 1t may interest you to know
that six times as much is being re-
discounted in certain reserve banks
for crop moving sections as has ever
been deposited in such sections by the
treasury. There is no conflict be-
tween my statement and Governor
Harding's. He was speaking for the
reserve system. I have assured that
I am in favor of the orderly market
ing of all commodities. Governor
Harding asserts the same. The banks
are lending more money today to ag-
riculture and industry than has. ever
before been lent. have repeatedly
expressed myself in favor of orderly
market;rg and of the promotion CT
coopers ';--e marketing among farm
ers. / e not see how I can add any
thing t. ae statement. My insistence
on the ;, ,sirability of orderly mar
keting Is pointed by my statement as
, to the uHwisdom of enterprises hold
ing conn, odities off the market artl-
fcially fer speculative purposes to
maintain war prices or higher than
war prices. 1 assume that the great
mass CT the people of this country
would recognize not only the unwis-
dom ba. the illegality Of such an IN
dertaking."
No Danger c: Panic.
In publishing this correspondence
Mr.. Byrnes stated he was satisfied
!, that the spectators nkow that the
secretary of the treasury was stat