The Birmingham age-herald., 1921-08-07
GoU. Harding's Letter 10
 Williams Clarifies Issue
Shows Former Comptroller to Have Cared More for Seeking Publicity Than for Care and Accuracy Re-
 garding Action of Federal Reserve Board

| essentially uncballenEeQ or 'uu-
 answered.
 What are the facts? In your let.
 ter of October IS, 1920, you offer but one remedy for the condition: | which it sets forth, namely, ruline
 that cotton factors" paper is eligible | for rediscount. At that time how ! ever, you knew. or should havt
 known, that the fedora reserve board
 had determined under advice oi l counsel that cotton factors paper
 Is ineligible for rediscount under the | terms of the law and that it did not | have, and has not now, the power to
 rule otherwise
 l Tn your letter of December 2S
 1920 you reviewed at length the req
 sons that prompted your belief thai
 lowor discount rate was at that time desirable and took occasion also i to refer to certain irrelevant cir
 cumstances Creviewed at greater 1 length in your letters) with respect
 to which you offered no remedies and made no recomme ndations whatso ever. Up to that time you had never offered a resolution looking to a re- duction in the rediscount rates anJ even. then had your neal intention 1 been to procure such action rather than merely to make 8 record you might have done Aso at any time in the usual method, available to every member of the board, including your. l self-a formal motion at a board
 meeting There never has been d time~~when the federal reserve board evidenced any disposition not to give careful and courteous consideration to suggestions and recommendations
 made to it by any of it's members in the usual course. It was only when the federal reserve board insisted | that you crystalize, in definite rec ommendation, the many various views expressed in your letters that you
 made the motions quoted below at a meeting of the board on February 25, 192L That was. of course, after you had written and sent each one of the letters above referred to, ex- cept that of February 26, 1921. Williams Resolutions
 "As you may remember however l it was unanimously agreed at the
 meeting of February 25 1921, to post 1 pone discussion of action upon your motions until 10 o'clock on the morn li ing of February 26.
 The first motion was as follows, Moved that in view of all condi
 tions, including the success of the 6 per cent rate in the Richmond
 Cleveland, Philadelphia and San
 Francisco districts, the federal re-
 serve board request all the federal
 reserve banks, effective March | 1921, to adopt a maximum discount
 rate of per cent
 | Tt was the sense of the meeting that the action contemplated by this ] motion should not be taken at thai time, and that it should not be taker
 without reference to the judgment of ] the boards of directors of the several
 federal reserve banks. It was ac-
 cordingIy moved and voted that this
 motion offered by you should be laid upon the table.
 | The second motion, which you
 made was as follows:
 | Moved that the federal reserve 1 board requests the abolition as ot | March 1, of the progressive rate ir
 all those districts where the pro l gressive rate is now applied 1 Tt was the sense of the meeting
 that the action contemplated by this
 motion should not be taken at that time, and that it should not be taker
 without reference to the Judgment ei | of the boards of directors of the
 federal reserve banks concerned. Il l was accordingly moved and voted
 that this second motion offered os 1 you should be laid upon the table. l "The third motion which you pre-
 scented was as follows:
 Moved that effective March !
 1921, the federal reserve banks be
 requested to establish a rate of 41a per cent upon member banks loans secured by Liberty Bonds in cases where the Liberty Bonds were pur- chased originally by the member banks at par. such loans to be made on condition that the borrowers shall make reasonable reduction every 60 days, 1t being understood that the federal reserve banks shall not grant such loans at said 4h per cent rate
 when they are applied for to obtain new money not needed for essentia, purposes, or not needed to prevent
 the borrower from being driven to
 the necessity of selling bonds cost ing him 100. The above 4iz per cent rate shall also apply to discount by reserve banks of notes made by rns customers of member banks when se-
 cured by Liberty Bonds which were paid for at par, and which belong to the borrowers as original subscrib- ers.'
 Tn view of the fact that this third motion was clear-cut it was acted upon at once, and defeated by the vote of every member present other than yourself.
 Not Adequate Remedy The votes taken by the federal re- serve board with respect to the mo- tions which you made were unfavor- able to those motions at that time. not becaue they originated with you, but because each member of rhe board present, in the exercise of his free and honest judgment. believed that the action proposed by you would not then have remedied the serious conditions to which you re- ferred and might then have resulted in conditions even more serious and more pitiable than those which you described. That action by the board with respect to Your motions was complete and definite disposition of the concrete questions presented in the letters under consideration.
 Since your attendance at board meetings was irregular after October 1, 1920 (the minutes show that of &A. vonoxinrS halA katxnaau nc-