Evening star., 1921-08-03
REVIEWS CRITICISM
| OF RESERVE BOARD
Former Controller Charges
Discrimination Against
Farm Interests.

John, Shelton Williams, former con-
troller of the currency. resumed today
his criticism before the congressional
agricultural commission of alleged
credit discrimination against farming
interests by the federal reserve sys-
tenn. In a clash with Representative
Mills. republican, New York, Mr. VIII
liams~ said he stood by" his charges
that in specific instances reserve
banks required members to put up 200
and 300 per cent collateral IN larm
paper before lending. ,
do you know that" Mills demand
ed. Give US an instance"
60 to the reserve board" Mr.. Will
liams retorted. "rhey have the
Later the witness agreed to furnish
details of one southwestern bank case
where. he said. a lawsuit against a
reserve bank was being matured by
member bank officials.
AS reserve board member. Mr..
Williams said. he had fought increas-
interest rates. which made a bank pay
higher interest on rediscounts as its
total of borrowing increased.
Rate rs High Ms 81.
"One cotton bank was charged 81
per cent" he said. land when it's bor-
rowing increased. during the cotton
moving period, the rate went as high
at 81 per cent. The practical result
was that this little bank was forced
to choose between letting its custom
ers face ruin or paying ruinous rates.
These charges We're super interest," "
Mr.. Williams said. while at the same
time New York banks We're getting
large amounts at per cent He
told of being voted down on resolu-
tions" at board meetings.
What was the theory of progress
sive rates." Mr.. Mills asked.
Go to the reserve board" Mr.. Will
some increase in rates on excessive
borrowings. but I never dreamed of
the extent to which ths board would
GO
But you approved of the princi-
ple?" Mr.. Mills persisted.
Not when ! found the injustices
and abuses which the board allow ed
Mr.. Williams said.
Delay In Making Protest.
Representative Mills tried to get
Mr.. Williams to say that he did not
protest the progressive rate system
until eight months after it went into
effect.
II was ignorant of them for several
months after they were established"
Mr.. Williams said.
The fact is. you not only approved
the principle of progressive rates.
but you approved the details of the
specific plan?" Mr.. Mills asked Mr.
Williams.
Il presume. If the records show it.
that l approved the plan." Mr.. Will
liams replied. but if so. il was an
error of Judgment. and l did not share
the error of refusing to change the
plans after their workings were dis
closed"
Mr. Mills read from the board min
utes to show that individual plans
submitted by district banks had been
approved or amended by the board.
I'm August. 1920. the Atlanta bank
asked permission to suspend the pro-
eressive rate until January, 1921"
Mr. Mills said land on August 81. you,
with the other members of the board.
voted against the request"
Because / did not have informa- =
ton the governor of the board should
have given its members" MIR. Will
liams replied
From the mass of his board corre-
spondence. Mr.. Williams read a state
ment that the progressive rates went
into effect while the reserve system
had an unused lending power of
S70O, 900. 900
Representative Funk. republican. H.
linois, protested the discussion of
backyard quarrels between banking
men," but Mr.. Williams went ahead.