The county record. [volume] (Kingstree, S.C.) 1885-1975, 1920-10-21
RESERVE BANKS
FAVOR FARMERS
SOUTH TREATED MORE LIBER-
ALLY, ACCORDING TO MEM
BER OF BOARD

BER OF BOARD
Greenville, Oct. 19.-Despite reports
there has been no curtailment of the
amount of bank credits outstanding,
but, on the contrary, there has been
a continuous expansion, not only
of commercial loans among the banks
of the federal reserve system, but OF
loans for agricultural purposes, ac-
cording to an address of George j..
Seay, governor of the Richmond Fed
eral Reserve Bank, read before the
South Carolina Cotton Manufacturers
association here today. The paper
was read by. Charles A. People, depu-
ty governor of the bank, in the ab-
sence of Mr.. Seay.
'No section of the country has been
so literally treated in the matter OF
extended credits as has been the
South" Mr.. People said, "and yet IN
that section of the country we hear
the loudest complaints and the most
CONSPICUOUS. Perhaps she is suffering
most at the moment. Whatever COM
plant she may have, she cannot COM
plain of curtailment Of credit, and she
has, in fact, been treated more liter-
ally than any other part Of the coun-
try, and capital has been drawn from
other parts to lend her"
Mr.. People, representing Governor
Seay, quoted freely from statement
recently prepared by Governor Seay
answering vigorously and in detail
current criticisms of the federal re-
serve banks. The criticisms discussed
and the answers given were thus sum-
married. in Mr.. Peoples address today:
Almost Reckless Expansion
"First. That there has been such a
marked curtailment of bank credit in
recent months as to amount to cam
paign in restraint of trade. The truth
is, however, ssAat there has been an
almost reckless expansion in bank
credit durinS rs psriod, and that the
volume of botR agricultural and COM
mercialss sioans has continuously in
creased Moreover, on June 30 last
the funds of The member banks loaned
.a AN
and invested were actually s2,5OO,OOo,-
600 ,more than their own resources
available for such purposes. Two
things made this great expansion pos
sible, namely, the concentration OF re-
serves in, and the note issuing power
Of the federal reserve banks.
Second. It is charged that the
South .partiqqlarly has suffered at the
hands of the. federal reserve banks
On the contrary, no section OF the
country has been dealt with as liber-
ally as the South; the three reserve
banks of Richmond, Atlanta and Dal-
las have been able, by exhausting their
own resources and borrowing more
than 500, 100000 from other reserve
hanks, to lend their members almost
three times their reserve deposits.
i, "To speak specifically of South Car
blinas the member banks in this State
have borrowed continuously for the
mast fifteen months twice their
equitable share from the Federal Re
serve Bank of Richmond.
{ "Third. 1t is said the Federal Re
serve Board has sought to dominate
the banks of the country. In answer
l emphasize that six of the nine dl-
rectors of each federal reserve bank
are elected by the member banks and
are representative successful, active
men of affairs, constantly in intimate
touch with the business conditions OF
the district; that the Federal Reserve
Board has had very little direct power
over the federal reserve banks and
none over member banks in the
granting of credits; and, in fact, that
the reserve banks lend their member
banks less than Is per cent. Of their
total loans to their customers"
Pointing out that the federal reserve
banks had gone through successfully
period of marked expansion, incident
to financing the government during
the war, and that they are now facing
the more difficult task of a return to
normal conditions, Mr.. People empha-
sized the need of clearer understand
ing of the facts in the case and for
mutual confidence on the part of the
bankers and business men generally.