The Washington herald., 1921-10-06
BLAMES FEDERAL
RESERVE FOR BAD
CREDIT CONDITIONS
Banks Profiteer With Its
Full knowledge, Says
w. c. Durant,
ALL BUSINESS HURT
Auto Executive Believes Dis
count Rate Should Be
8 Per Cent.
ALL BUSINESS HURT

"Prohteering in money" carried on
with the full knowledge of the Fed
eral Reserve Bank, Is responsible for
present business conditions in the
opinion OF w. C. Durant. president Of
Durant Motors, Inc. Mr., Durant
charges that the Federal Reserve
Bank is permitting the assessment Of
outrageous commissions and bonuses
against solvent concerns for the use
of money to carry them through the
readjustment period.
This statement was made In answer
to the query. What IL the matter
with business and what is the remedyr'
asked him by a financial writer. The
remedy, he suggests. is that money
and credit for legitimate business be
made available Immediately in gener-
GUS measure, and that the discount
rate OF the Federal Reserve Bank be
reduced to 3 per cent. The statement
follows:
There are many contributory causes.
but the trouble. and we are in real
trouble. Is largely financial. Regard.
less OF reports to the contrary and
cheering articles appearing regularly
In print. business il not good.
The bankers Of the country have
for months past been in a state Of
MIND" the attitude Of the Federal Re
| serve Bank, with respect to discount
rates and extension OF credits, being
very largely responsible for it, We
have for months past been enjoy
ing (?) a "bankers' panic and until
this panic has run its course nothing
that the business men Of the country
can do or say will improve the situa-
ton.
Our merchants and manufacturers
| who are today struggling with the
problems incident to this trying period
of readjustment need encouragement
and fair treatment, and the bankers
who hold the key 10 the situation
should and must take the initiative.
1--WE cannot hope for better times
until money for legitimate business.
not speculative purposes, can be OBJ
tained at reasonable rates and credit,
where properly safeguarded. Is avail
able in generous measure.
The Federal Reserve Bank at this
! critical time should encourage, rather
than discourage. the extension Of
credit and should reduce its discount
rate to per cent. Quick. decisive,
courageous action on the part OF the
Federal Reserve Bank would. in my
opinion. very materially improve the
situation, would hearten our business
men and set in motion the wheels Of
commerce and Industry.
For the purpose OF relieving the
pressure in times of stress and pre-
| venting n oney panics. the government
created the Federal Reserve Bank. 1t
is a well-known fact that high grade,
progressive. solvent concerns in need
of money to carry them through the
readjustment period have been paving
most outrageous commissions and
bonuses for the accommodation Tin
some cases the terms have been almost
| confiscatory), while the Federal Re-
serve Bank. with full knowledge.
stands idly by and permits this out
rageous proiteering TO continue.
The Federal Reserve Bank has the
| power to stop profteering in money.
| and its failure to do so is very largely
| responsible for the general business
| paralysis, the surrender Of many OF
our splendid industrial institutions to
the greedy money vultures resulting
| in the present conditions of discomfort,
unrest. and its resultant vast army Of
unemployed"