Vernon Parish Democrat. (Leesville, La.) 1917-193?, 1921-12-08

of state banks and trust companies
amount to as much again, making the
total probable reduction of deposits
in the period named about Six Billion
Dollars; and, while this huge reduc-
ton in deposits was straining the banks
the Federal Reserve System, instead
of easing the situation by at least re-
framing from calling in loans, actu-
ally contracted its advances to both ma
tional and state banks and trust COM
panies from $2,8O5,OOO,0O0 in Janu-
airy, 1920, to $2.l67,000,000 in April,
1921.
A National Scandal
am told that a member of Con-
gress recently described tire attitude of
the Federal Reserve Board succinctly
as follows:
IF you accuse the Board of having brought
about this great debacle, the members deny
that they are in any way responsible; but if
you congratulate the Board on having knocked
the bottom out of the markets and on having
raised the gold ratio to a point that is in it.
self national scandal, they will one and all
take off their hats, bow, and solemnly say:
We thank you We did it,
In two speeches one on April IS, 49,
I'll, before the Peoples Reconstruc-
ton League at Washington, and the
other at Augusta, Ga, on July H., be-
fore the Board of Commerce, | made
public certain facts in regard to the
methods and policies of Federal Re
serve Board and the operations of the
Federal Reserve Banks, which result
ed in the prompt introduction in both
Houses of Congress of resolutions call
ing for an investigation of the Federal
Reserve Board.
The Board then got busy. On the
night of July l9, 1921, the Board gave
to the press a six-hundred word state
ment, in which, in expressing their ten
der sympathy for the people in the
crushing losses which had been sus-
tanned, following the carrying out of
the policies of "deflation" they said:
The Federal Reserve Board and the Fed
eral Reserve banks recognize the urgency for
rendering all proper assistance to these impor-
tant interests Cotton producers and dealers)
during such abnormal times
and made the much-belated announce
ment, that effective at once:
The Federal Reserve banks, in addition to
credits already extended, are able and stand
ready to extend further credit for the pur-
pose of harvesting and marketing the coming
crop in whatever amount may legtimately be
required"
Thereupon about July 81, rates on
agricultural and commercial paper
were reduced from E to 5I2 percent
in four Federal Reserve districts, in
Guiding Boston, New York, Philadel-
phia, and San Francisco.
On July 10Th. 1921, the President
issued statement from the White
House regarding measures which had
been taken for the relief of the finan-
cial and business situation in which he
said:
Perhaps the most important development
has been the action taken by the Federal Re-
serve banks in reducing discount rates. This
action is calculated to relieve the stagnation
of business. y"
The System Retreats
July 26 had been set by the Joint
Congressional Commission as the day
for me to appear before them in con-
nection with the criticisms which had
made against the Boards policies, in
my Augusta, Ca, speech, but at the
last moment and after | had arrived
in Washington for the purpose of go
ing before the Joint Committee, the
hearing was adjourned for one week
as | am informed at the urgent re-
quest of the Reserve Board. Comment
ing upon my invitation to attend and
the adjournment for a week, the Man
ufacturers Record of August II, 1921,
said editorialIy:
Instantly, we may say, following news that
there would be a Congressional investigation,
the Board drew over its lions skin the mantle
of lamb.
1T would not be able to answer Mr.. Viii
liams on the date originally set for the hearing,
it averred, but it could week later.
This significant fact stands out: Mr.. Viii
hams, reinforced by public opinion from all
over the United States, has scored tremen-
dous victory before he even took the witness
stand. His Augusta speech had forced the
issue.
Rather than meet it, the Board hurriedly
and drastcally reversed itself all along the
line. 1t (a) saw that rediscount rates were
cut; (b) abandoned the system of graduated
rates; (c) receded from drastic liquidation
Of farm products, urging the various Reserve
banks to be liberal hereafter and not to force
On the market commodities for which only |
ruinous prices could be got"
could go on into detail indefinite
y with instances and incidents involv-
ing tens and hundreds of millions of |
lzII--. IL