The Birmingham age-herald., 1921-07-24
RESERVE BOARD MAY
 PUT CRITICS IN A HOLE

l Washington, July 23.-- -(Special)-- l The federal reserve board, on the de- | fensive for many months, is about to put it's congressional critics "in the
 hole."'
 l At any rate, battle royal seems to be impending, and both sides, 1t
 would appear, are preparing for a
 show down."
 The testimony. given this sweek be-
 fore the Senate committee on finance 1 by W. P. G. Harding, governor of the
 federal reserve board; the request of
 the governor that the House com
 mittee on banking and currency I thoroughly investigate every opera
 tion and policy of the board and the | system: the declaration of the board and member banks,sthat they stood I prepared further to assist the farmer, and the reduction of discount rates | by certain of the banks, with intima-
 tion that others would quickly follow
 suit, has put an entirely different phase on the situation.
 The congressional critics are now
 on the defensive. They are falling
 back on the argument that their re-
 sistence forced the recent develop
 ments by the board and its governor. l Hoover yindicates Board | In connection with the situation, if is now regarded as possible that in order to take care of the farmers
 and the cattle growers, amendments | to the laws creating the federal re-
 serve system and the farm loan l banks, are necessary; or it may be
 proved to be necessary that stif an-
 other organization be created. This alleged necessity Is pointed out in a letter addressed by Secre- tary Hoover to Senator Capper of Kansas. The secretary makes the l point that the federal reserve system cannot be called upon for loans on agricultural paper for longer than
 six months, without jeopardizng the whole commercial banking struc-
 ture.' He further points out that | the farm loan banks were organized to furnish exceedingly long credits rather than to serve in emergencies. He declares that to serve in emer- gencies of longer duration than six months, some additional institution should be established, or amendments to existing laws made. The state ment of the secretary bears out the position of the federal reserve sys- tenn that it has done all that it could | do, always in conformity with the rules of prudent banking.
 Farmers Support Hoover A remarkable feature attending the
 Hoover declaration is that the farm CTS, for whom many valiant con- gressman has fought, bled and died" agree with him, and instead of pourineDout their wrath on the board and it's S governor, as has become fashionable in some select quarters, hold the board blameless.
 The president of the American
 Farm Bureau, federation. J.. R. How ard, in a statement today, declared: Secretary Hoover's declaration that the federal reserve system cannot be
 called upon for loans of over six months without jeopardizing the whole commercial structure is exact ly what the American Farm Bureau
 federation has been contending. Howard then agrees with Hoover that the farmer needs loans up 10 six months for. production and mar
 ketingg annual products, loans pe-
 tween six and twelve months Tor
 these purposes, loans from one to
 three years for producing and mar
 keting cattle. loans from one to three
 years for farm equipment, and long
 term loans for purchase and improve
 ment.