Cleveland County herald., 1921-06-02

paper was rediscounted by Federal Reserve banks in the il months down to December 1, 1920, as was redis- counted during the entire year of 1919, according to estimates furnished by Governor Harding of the federal re- serve board to Senator A. J. Gronna, chairman of the senate committee on agriculture. The estimates furnished show that farm paper rediscounted last year amounted to almost S2000,- GOO GOO. The estimates are: 1920, $1,- o8o O33, ,OOO; 1919, SIPS, ,266,00O.
 The farmers have been complaining that Federal Reserve banks discrimin- 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 discrimipated against and on this contention they have based their demand for a revival of the War Finance corporation. The bill reviving the corporation has been passed by congress-
 More Loans Than Are Tabulated. In his letter to Senator Gronna. Governor Harding int1mates that wbilA his figures are merely estimates bsset7 on the production and sales of farm products, undoubtedly much more money than is tabulated was actually 1 loaned to the farmers. He writes:
 'In compliance with the request made in your letter of December 14y 1 for information regarding the amount i of actual agricultural paper redis- | counted during the years 1919 9nf. 1920 (to date), based on agricultcrn. production and sales of the respectiveI years, have the honor to submit hcfvs 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 live stock hav- ing a maturity of not longer than six months, are eligible for rediscount by
 
 maturity in all other cases being 90l days. The Federal Reserve banks re- discount large amounts of agricultural paper which has maturity not ex- ceeding 90 days, but such paper isl classified with other paper of like ma- turity.
 "Therefore, agricultural and ivel stock paper, as shown by the Federal Reserve banks, applies only to paper | having a maturity of longer than sol days The board receives this infor- nation from day to day and the amount of agricultural discount atI each Federal Reserve bank. that is, paper having a maturity of from nine l ty days to six months. is publishedI each month in the Federal Reservel Bulletin. | "The special figures furnished byI the Federal Reserve banks In accord ance with your request are in all casesl estimates, no exact figures of the totalI volume of loans for agricultural pur- : poses being available at the Fe,ierall | Reserve banks. In the first place, most of the borrowings at Federal Reserve banks by member banks during the year 1919 and considerable propor- tion of these borrowings during the current year have been in the form of | the borrowing banks own notes, se- cured by government obligations or by commercial, industrial and aericuI- tural paper. It is known that member banks in New York city have made ] large loans to their correspondents banks throughout the country, ard it Is reasonable to suppose that part of the proceeds of such loans have beer, applied by the borrowing banks for agricultural purposes but it is irlpos. sible to state the amount
 Conditions Similar in Other Banks.
 "The same is true with respect 1o loans made by member banks in Chi cago, St. Louis, Minneapolis, Kansas City. New Orleans and other financial centers throughout the country. Non- member State banks lend large sums in the aggregate for agricultural pur- poses. But as they have no dealings with the Federal Reserve banks their loans to farmers are not reflected in the figures furnished by the Federal Reserve banks, although it is fact that all Federal Reserve hanks have been lefHlng . large amount to mem. 'ef banks, which have in turn redis. counted paper for nonmemher banks
 N"lt Slould be horne in mind also that the f9tal amount of farmers ne,e. reaiseounted by Federal Ress-y4 banks gives no indication of the amonnf advanced by the Federal Re serve hanks to finance the prodncfior and safe of farm products. since larct amounts advanced to member bank. In other districts on comniercial ant mdHstfial paper are used bv thes, banks Tor Icons to agricultural inter ests Only the Federal Reserve bank
 of Richmond, Atlanta St j.o.,is an.