Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1921-01-13
LEND FARMERS
TWO BILLIONS
Governor Harding Says Reserve
Banks Increased Instead OF
Restricting Loans.
FIGURES REFUTE CHARGES
More Than Two-and-a-Haif Times a.
Much Paper Was Discounted IN
Eleven Months Of 1920 as in the
Year 1e1e-Report to Gronna.


Washington. than two ana
one-half times as much agricultural
paper was rediscounted by Federal
Reserve banks In the IL months down
to December l, 1920, as was redis-
counted during the entire year OF 1917
according to estimates furnished by
Governor Harding Of the federal re-
serve board to Senator A. J. Gfonha'
chairman of the senate committee Oh
agriculture. The estimates furnlsheu
show that farm paper rediscounted
last year amounted to almost $2,ooo-
NOOOO. The estimates are: 1920, $l'-
$50. O33. 600; 1919, $729, 266,OOO.
The farmers have been complaining
that Federal Reserve banks discrlmih-
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 We're greatly Increased.
Nevertheless, the farmers have insist
ed that they have been disseminated
against. and on this contention they
have based their demand for revival
of the War Finance corporation. Inc
bill reyiving the corporation has been
passed by congress.
More Loans Than Are Tabulated.
In his letter to Senator Gronnn,
Governor Harding lntimates that While
his figures are merely estimates based
on the production and sales OF farm
products, undoubtedly much more
money than is tabulated was actually
loaned TO the farmers lie writes:
an compliance with the request
made in your letter of December a.
for information regarding the amount
of actual agricultural paper redis-
counted during the years 1919 ana
1920 Ito date), based on agricultural
production and sales of the respective
wears. have the honor to submit here
with copy of q tabular statement COM
piled from telegraphic data received
from all Federal Reserve banks.
"Section Is of the federal reserve
act provides that notes, drafts and
bills drawn or issued for agriculfuFai
purposes or based on live stock hay-
ing n maturity of not longer than six
months, are eligible for rediscount by
a Federal Reserve bank, the limit OF
maturity In all other cases being ~
days. The Federal Reserve banks re-
discount large amounts of agricultural
paper which has maturity not ex-
ceedng 80 days, but such paper Is
classified with other paper of like ma
turity.
"rherefore, agricultural and live
stock paper, as shown by the Federal
Reserve banks, applies only to paper
having n maturity of longer than ~
DAYS. The board receives this infor-
nation from day to day and the
amount of agricultural discount at
each Federal Reserve bank, that Is
paper having a maturity of from nine
ty days to six months, Is published
each month in the Federal Reserve
Bulletin.
1.-The special figures furnished by
the Federal Reserve banks In accord
ance with your request are in all cases
estimates, no exact figures of the total
volume Of loans for agricultural pur-
poses being available at the Federal
Reserve banks. In the first place, most
of the borrowings at Federal Reserve
banks by member banks during the
wear 1919 and a considerable proper
ton Of these borrowings during the
current year have been in the form of
ha, ,IycS
cured by government obligations or by
commercial, industrial and agricul-
tural paper. 1t Is known that member
banks in New York city have made
large loans TO their correspondent
banks throughout the country, and 1t
is reasonable to suppose that part of
the proceeds of such loans have been
agricultural purposes, but 1t is impos-
sible to state the amount.
Conditions Similar In Other Banks.
"The same is true with respect to
loans made by member banks in Chi
cago. st. Louis, Minneapolis, Kansas
City. New Orleans and other financial
centers throughout the country. Nom
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 1t is fact
that all Federal Reserve banks have
been lending large amount to MEN,
Der banks, which have In turn redis-
counted paper for nonmember banks.
at should he borne in mind also
that the total amo,:nt of farmers notes
rediscounted by Federal Reserve
| banks gives no indication Of the
amount advanced by the Federal Re
serve banks to finance the production
and sale of farm products, since large
amounts advanced to member banks
In other districts on commercial and
Industrial paper are used by these
banks for loans to agricultural inter
ests Only the Federal Reserve banks
of Richmond, Atlanta, st. Louis and
Minneapolis have taken account Of
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