Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-08-04
RESERVE BOARD
HIT BY WILLIAMS
IN j. s. SENATE

WASHINGTON, Aug. John
Shelton Williams, former comptroller
of the currency, appeared today be-
fore a joint congressional commits
sion considering agricultural prob
lens, with the declared purpose of
| criticizing administration of the fed
eral reserve banks. Governor Har-
ding, of the federal reserve board,
sat in the audience.
81 did not agree with the policy of
the reserve board in Unfortunately
raising interest rates in 1919" Mr..
Williams said, nor did I agree with
it previously in a policy of making
prodigal advances to institutions in
the east, of the disa dvantage of the
west and south.
II found that the board in 1918
was advancing directly and indirectly
! a total of $13O,000,000 to a single In
stitution in New York City"
Mr.. Williams read statistics which
he said showed New York, Chicago
and other city banks were getting
more reserve loans than all the coun-
try banks at the period. Mr.. Mills
asked that he present 1921 figures,
too, and Mr.. Williams promised to
do so.
The New Yo$rk Reserve bank, MIR.
Williams said, always was a tremen-
IN 6n of
times it's capital, for use i4 specula-
tive operations and promotions"
Representative Mills, Republican,
New York, moved to strike out the
testimony, but the commission voted
him down.
aren't you giving these figures
without any reference to the assets
and deposits of the borrowing
banks?" Mr.. Mills asked.
II prefer to have the board, whose
members L see here, ask questions as
to their administration" Mr.. Will
liams replied, adding that the board
adopted general rules which con-
trolled the amount of credit granted
to individual banks and that these
rules varied with varying conditions
in the different reserve districts.
Mr.. Williams said he had protest
ed to the board at the extent of the
credit because the bank was con-
spicuous for it's speculative activi-
ties"
"This was not a national bank?''
Chairman Anderson asked.
1T was not" Mr.. Williams re-
FILED. 81 asked a special examination
of it's conditions, but it was not al
! lowed, on the ground that the boards
! intervention might alarm the state
| banking authorities"
| Senator HARRISON. Democra&, Mis-
sissippi, asked if the reserve law did
not forbid speculative borrowings.
Mr.. williams said it did.
But that does not prevent an in
stitution from borrowing $10,000,00U
| in Liberty bonds" Mr.. Williams ad-
ded, land rediscounting it with he
reserve system, and thcn lending the
money to it's president for speculative
operations"
'ISn II lFlie ILdI IlldI lIioNiIuIAO
| is largely engaged in lending money
for export of grain, all other farm
products and manufactures to Eu-
roper" Mr.. Mills asked.
"I presume it is largely so engag-
cd" Mr.. Williams replied. Its funds
were largely loaned to its executive
officers for speculative operations.
1.-THE reserve board has always
loaned largely and at low rates OF
Interest," Mr.. Williams continued, Ito
certain New York institutions, and
maintained the practice in good TIM s
and hard times alike, when the board
was forcing liquidation at immense
sacrifices to borrowers in Richmond,
Atlanta and Dallas dlstrlcts.