Wauwatosa news. [volume] (Wauwatosa, Wis.) 1900-1948, 1921-01-21
Governor Harding Says Reserve
Banks Increased Instead OF
Restricting Loans.
FIGURES REFUTE CHARGES
More Than Two-and-a-Half Times as
Much Paper Was Discounted in
Eleven Months of 1920 as in the
Year 191o--Report to Gronna.

Washington.-More than two and
One-half times as much agricultural
paper was rediscounted by Federal
Reserve banks in the IL months down
to December /, 1920, as was redis-
counted during the entire year of 1919.
according to estimates furnished by
Governor Harding of the federal re-
serve board to Senator A. J. Gronna.
chairman of the senate committee on
agriculture. The estimates furnished
show that farm paper rediscounted
last year amounted to almost $2,OsO,-
100000. The estimates are: 1920, ST.
$50, 033, 000 1919, $729, 100000.
The farmers have been complaining
that Federal Reserve banks discrimin-
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
against. and on this contention they
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
M fba nrodnctfnn and caToc of form
products, undoubtedly much more
money than is tabulated was actually
loaned to the farmers. He writes:
ain compliance with the request
made in your letter Of December IA
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, have the honor to submit here
with copy of a tabular statement COM
piled from telegraphic data received
from all Federal Reserve banks.
"Section 13 of the federal reserve
act provides that notes, drafts and
bills drawn or issued for agricultural
purposes or based on dive stock hav-
ing a 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 90
days. The Federal Reserve banks re-
discount large amounts of agricultural
paper which has a maturity not ex-
ceeding 80 days. but such paper is
classified with other paper of like ma
turity.
Therefore, 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 infer
nation from day to day and the
amount of agricultural discount at
each Federal Reserve bank, that is.
paper having maturity of from nine
ty days TO six months, Is published
each month Ia the Federal Reserve
Bulletin.
"The special figures furnished by
the Federal Reserve banks in accord
ance with your request are in all cases
O1NAAA'"sNSs hN SAdtl HSuEtS ul 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
hanks by member banks during the
year 1919 and considerable proper.
ton of these borrowings during the
current year have been in the form of
"A a
cured BY Scvegnment obligations or by
commercial, Industrial and agricul-
tura paper 1t IS known that member
banks in New York city have made
large loans TO their correspondent
banks throughout the country. and It
is reasonable to suppose that part OF