The New York herald., 1921-08-03
WILLIAMS ATTACKS
FEDERAL RESERVE
Charges Board Shows to New
York Banks Favoritism
in Borrowing.
FARM LOANS CURTAILED
Ogden Mills Challenges For
mer Comptroller With Vol
umes Of Statistics.

WASHINGTON, Aug. 2.-Policies or the
Federal Reserve Board during the last
eighteen months or more were attacked
before joint Congressional commission
by John Shelton Williams, former Comp
troller OF the Currency, who charged that
the board had displayed undue favordt-
ism in lending 70 New York banking
groups. while Southern and Western
borrowers were unduiy curtailed. There
was abundant ground for Complaints
Of discrimination by farmers generally"
he added.
The Congressional commission was
appointed 70 inquire into the agricultural
situation and summoned Mr. williams in
connection with It's investigation into
credit facilities for farmers.
Many Of Mr.. Wiiliams's assertions
were challenged in cross-examination by
REPRESENTATIVE Ogden Mills tN. Y.
KEEP, commission member, who was
armed with volumes OF statistics. The
ciashes requird commission rulings time
ana again. During the examination
Gov. Harding OF the reserve board and
several others OF its officials were pres
ent. Mr.. Williams's statement was un-
completed after six hours session.
N December, 1919. Mr.. Williams said,
one New York State banking institution.
which be described as known for spec
uIative activities" borrowed sI30ooo.-
ooo through the New York Federal Re-
serve Bank. No law was broken. ,s
said. but several other New York banks.
In hard and in coed times" were allowed
TO hold out large amounts of reserve
,oans while Western and Southern
borrowers were being pressed to reduce
loans. Mr.. Williams read memoranda.
and letters intercharged between him
self and Gov. Harding over the situation
or which he complained
The board adopting the noIicv :,
Forcing up interest rates. he said vas
indirectly responsible for 30 per cent.
interest charges prevailing on the New
york money markets, and this drained
on FUNDS from the farming sections"
Mr Mills met him at this stage with
series OF statistics. tending to show TINT
richmond, Minneapolis. Dallas, Atlanta.
Kansas City and st. Louis banks were
borrowing much greater sums proper
uonately than New York institutions
You've seen the figures. haven't you"
Mr.. Mills demanded during interchanges
In which Mr.. Williams told him to go
to the reserve board for the statements"
one borrower of call money had 70
pay zoo per cent to get a 500. 900. 900
loan. Mr.. Williams said. although Mr..
Mills insisted he had misinterpreted the
arrangement. and the charge was IS per
cent. At the same time, he added
Western institutions rediscounting wera
Obliged to put up collateral OF 100 and
200 per cent. in excess Of the amounts
they got
Give us one example of that" Cha,r-
man Anderson instructed the witness,
but after an interchange Mr.. Wiliian,s'>
repeated response. Get II from the re-
serve board" was accepted as final.
Mr.. Mills likewise went into rules es-
tablished by the board for credit con-
troll. and the creation by Il OF "bas,c
line" which determined banks borrow
ing limit. Gov. Harding win follow Mr..
Williams probably tomorrow.