The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1921-02-03
LEND FARMERS
Two BILLIONS
Governor Harding Says Reserve
Banks Increased Instead OF
Restricting Loans.
FIGURES REFvTE CHARGES

! ! FIGURES REFUTE CHARGE,
, More Than Two-and.a-Haif Times a.
| Much Paper Was Discounted in
Eleven Months Of 1920 as in the
Year 1e19--Report to Gronna.
; Washington.-More than two ant
: one-half times as much agricultural
paper was rediscounted by Fedora
Reserve banks in the II months dowI
. to December l, 1920 as was redis
, counted during the entire year of 1919
according to estimates furnished by
i, Governor Harding of the federal re.
serve board to Senator A. J. Gronna
chairman of the senate committee IN
agriculture. The estimates furnished
Show that farm paper redisconnted
last year amounted to almost $1,000
100000. The estimates are: 1920. ST.
950,O33O0O; 1919. $729, 100000.
The farmers have been complaining
that Federal Reserve banks discrlmin-
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 were greatly increased.
, Nevertheless, the farmers have insist
ed that they have been Disseminated
/ have based their demand for revival
of the War Finance corporation. The
bill reviving the corporation has been
passed by congress.
More Loans Than Are TabuIated.
In his letter to Senator Gronna,
Governor Harding intimates 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. He writes:
I'm compliance with the request
made in your letter of December H.
for information regarding the amount
Of actual agricultural paper redis-
counted during the years 1919 and
1920 Ito date). based on agricultural
production and sales of the respective
years, I have ,he honor to submit here
with copy of tabular statement COM
piled from telegraphic data received
from all Federal Reserve banks.
"Section 10 of the federal reserve
act provides that notes, drafts and
bills drawn or issued for agricultural
purposes or based on live stock hav-
ing maturity of not longer than six
months, are eligible for rediscount by
Federal Reserve bank the limit of
maturity in all other cases being 80
days. The Federal Reserve banks re-
discount large amounts of agricultural
paper which has maturity not ex-
ceeding 80 days, but such paper is
classified with other paper of like ma
turity.
wherefore, agricultural and live
stock paper, as shown by the Federal
Reserve banks, applies only to paper
having a maturity of longer than 80
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
year 1919 and considerable proper
ton Of these borrowings during the
current year have been in the form OF
The borrowing banks own notes, Sc
cured by government obligations or by
commercial industrial and agricul-
tural paper. 1t is known that member
banks in New York city have made
arge loans to their correspondent
banks throughout the country, and it
s reasonable to suppose that part of
he proceeds of such loans have been
applied by the borrowing banks for
agricultural purposes, but it is impos-
'ible to state the amount.
Conditions Similar in Other Banks.
"The same is true with respect to
oans made by member banks in Chi
ago, st. Louis, Minneapolis, Kansas
tity, New Orleans and other financial
enters throughout the country. Non
member State banks lend large sums
n the aggregate for agricultural pur-
'oses. But as they have no dealings .
With the Federal Reserve banks their
oans to farmers are not reflected in :
he figures furnished by the Federal
reserve banks. although it is fact v
hat all Federal Reserve banks have
cen lending large amount to men,
er banks, which have in turn redis-
ounted paper for nonmember banks.
1T should he horne in mind also s
hat the total amount of farmers notes 0
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