The Madison journal. (Tallulah, Madison Parish, La.) 1888-current, 1921-01-22
Governor Harding Says Reserve
Banks Increased Instead OF
Restricting Loans.
FIGURES REFUTE CHARGES
More Than Two-and-a-Half Times as
Much Paper Was Discounted IN
Eleven Months of 1920 as in the
Year 1e19-Report to Gronna.

wesbington.-More than two ana
one-half times as much agricultural
naner was rediscounted by Federal
Reserve banks in the IL months uowh
70 December /, 1920, as was redis-
counted during the entire year OF l9iS'
according to estimates furnished Dy
Governor Harding of the federai re-
serve board to Senator A. j. Gronna,
chairman of the senate committee on
a, jculture. The estimates furnlsheu
show that farm paper rediscounteu
last year amounted to almost SZ'Vo'
600 600. The estimates are: 192o, ST.
$50 O33, 900; 1919, s729, 100000.
The farmers have been complaining
that Federal Reserve banks dlscrimlh-
ated against them, and instead OF
making credits to the growers more
elastic. actually restricted loans.
Treasury officials have consistently
maintained that credits were not re-
stricted but were greatly increased.
Nevertheless, the farmers have insist
ed that they have been Disseminated
against. and on this contention tney
have based their demand for a revival
of the War Finance corporation. The
| bill reviving the corporation mas peen
passed by congress.
More Loans Than Are Tabulated.
In his letter to Senator Gronna,
Governor Harding intimates that while
his figures are merely estimates based
on the production and sales of farm
products. undoubtedly much more
money than is tabulated was actually
loaned to the farmers. He writes:
"In compliance with the request
made In your letter of December IA;
] for information regarding the amount
Of actual agricultural paper redis-
counted during the years 1919 and
1920 Ito date), based on agricultural
production and sales Of the respective
years. have the honor to submit here
with copy of tabular statement COM
piled from telegraphic data received
from all Federal Reserve banks.
Section 13 Of the federal reserve
act provides that notes, drafts and
bills drawn or issued for agricultural
purposes or based on, dive stock hav'
ing q maturity of not longer than six
months, are eligible for rediscOunt by
Federal Reserve bank, the limit OF
maturity in all other cases being 81
days. The Federal Reserve banks re
discount large amounts of agricultural
paper which has maturity not ex
ceeding 80 days, but such paper 1!
classified with other paper of like ma
turity.
Therefore, agricultural and llv'
stock paper, as shown by the Fedora
Reserve banks, applies only to pape
having a maturity of longer than o.
days. The board receives this infor
nation from day to day and tn
amount of agricultural discount a
each Federal Reserve bank, that is
paper having a maturity of from nine
ty days to six months, is publishe'
each month in the Federal Reserv
Bulletin.
"The special figures furnished b
the Federal Reserve banks in accord
ance with your request are In all case
estimates, no exact figures of the tots
f, volume Of loans for agricultural pul
poses being available at the FEEDERS
Reserve banks. In the first place. mos
of the borrowings at Federal Reserv
banks by member banks during tn
year 1919 and considerable proper
ton Of these borrowings during tn
current year have been In the form q
the borrowing banks own notes, 81
cured by government obligations or b
commercial, industrial and agricu
tural paper. 1t is known that membe
banks in New York city have mad
large loans TO their corresponder
banks throughout the country. and
IL -easonable to suppose that part {