The Hartford republican. (Hartford, Ky.) 18??-1926, 1921-08-12
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dshlnBtOn, aug. 4.-Cred1t poll
cies of the federal reserve system con-
tinued under examination of con-
gressional commission today in a
continuously stormy atmosphere, with
Governor Harding, of the reserve
board, as the sole witness.
"The federal reserve board didn't
create this financial depression, 3"
Governor Harding exclaimed toward
the end of the day. 1T saw it COM
ing and got ready to protect things,
and people ought to be grateful it
did so. Now all we need is cessation
of pessimism, which marks bad times
as foolish optimism marks good times.
We all know now everybody was go
ing crazy in the boom during the fall
of 1919.
This situation is going to work
out. There's no comparison between
the condition a year ago and condi-
tions today. Take cotton, with low
yield, and exports picking up. Banks
everywhere are fully justified now in
carrying loans.
"All we've got to do is to get out
of everlasting pessimism and quit say
ing everything is going to the dogs.
/ Why, man has to put up a good,
cheerful face if he wants credit You
can't talk to the banker like you do
! to the tax assessor"
Previously a sharp passage had
! taken place in which Representative
| Funk, Republican, Illinois; Represen-
tative Mills, Republican, New York,
and later Governor Harding, par
! tiCipated.
"Im keenly disappointed, Repre-
sentative Funk said, because the re-
| serve system has been challenged,
complained of, criticized and charged
/ on one ground, that it has discrimi-
mated against agriculture and we've
not heard one word from this wit
ness"
Representative Mills leaped to the
fray, asserting that the commission
had allowed John Shelton Williams,
former comptroller of the currency,
during two days, to make charge after
charge against the reserve board"
and that Governor Harding was en-
titled to common justice" in the
privilege of detailed response. Mr..
Funk told Mr.. Mills to handle your
affairs and I'll handle mine" while
Chairman Anderson ruled that the
governor was within his rights"
Farm Credits Not Called In
HAS the reserve board called in
farm cTedits?" Mr.. Funk demanded !
later
mo sir; it never has" Governor
Harding retorted.
How about the circulars OF the
San Francisco reserve bank" Mr. |
Funk continued, concerning the /!
price of wheat in 1920?"
81 never heard of that BEFORE"
Governor Harding said. Ibid it cause
b
at had some effect" Mr.. Funk re-
sponded.
THE board has cautioned reserve |
banks not to issue circulars" Cover
nor Harding continued. ITS the !
Job of a banker to look to the value |
of his collateral. but to do it in a
quiet way. 1t is not the function of |
the reserve system to regulate prices /
up or down, but to maintain prices"
In general, Mr.. Harding said, 1.-THE I
attitude of the reserve board toward |,
agriculture has been greatly nisun-
derstood and grossly misrepreseAted.'
"The whole trouble with tire re- !
serve system in meeting agricultural
demands is that reserve banks do not !
and can not lend to individual Gor-
rowers," he added. The paper Of |
borrowers must get into hands of |
member banks before it gets to the y
system
Discusses Eediscount Rates.
Giving the history or increases OF .
rediscount rates IN 1919 and 1899,
Governor ilaI dag asserted that Mr.
Williams, one q its chief critics. had !
participated in the rulings The ideal !
system, he said, would be to maintain |
rediscount rates just above market I
rates ON money, thus avoiding infla-
tion, and yet offering practically un-
limited credit.
Legal limitations, he held, govern !,
ed the board at all times. and con
troll of credit policies ought and did
center upon the twelve district re-
serve banks.
Cautiously, have never hear a
complaint from one bank in the At