Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1921-07-22
DENIES FEDERAL RESERVE
CAUSED DROP IN PRICES
Governor Scay answers Criticism
Made 10y Mercantile Corporation
Of "Dchation" Policy.
SEES No SPECIFIC REASON
business Conditions Brought About
by Causes That Go Deeper Than
This, the Head of Banking Insti-
tuition Declares.

1;,.:. -, g.,
80, ''' p''"' :"
,., - re
5,,,,,',,,,. ,'' ~ yes ~
'e''S'
'"' '"''"' ne
-, $500" :"
$500 ~ pI'.'''' '''' S'S
vac ~ io'
,..; 80"
-. '' '"'
va on"
,n -" =
Il, .o,,i, no,
49,, ,,,,,
lc,, nn,,,n
NJ, ,.. ,..
~
""'s"> '"r'""s Statements
II am going TO take the liberty or
analyains ana commenting upon soy
cral OF your statements. in the hope
that !, may bc profitable TO both OF
US f'rS'' you state that th" p"r-
,.r.r III, 49,
ot.n,,,,.,,. h., s,,,
~, ~ a',i,
49,, roso,,o .,.,,.
~, nj. .u,,,o .,a, ~
Inn, mo ,,od;, ,olic,. ., ~, a.,..
banks has boon tho dir.c, r,u., If
INC .5.f,,iop ar J.c,i,. :, ~. r.,.a.
az r,nmodi,fc ,,,,t,,n,,,,
ri,l,ur,I commentaries
"rh5s a.u,,in, .r d,c,i, ,.i
WAS not rcc,lio, f. ms co,,,ry 49,,
ia At,rihut, .uch L.clir.. g., ia.
nolf., of ,o,,-nl r,scrv,
is arbitrarily ia ASSIGN =, !. :,
nucur. which i, doos mo-, ,d ,a,a,
exercise. hut whi.b j. ,r.. r.sul, -,
those laws of action and rcac,i,n
winch have bccu at work from tn,
beginning of things.
In one paragraph you stare th,,
the policy has. az course. resulted
IN forcing dowN prices Of acricul
tnrai products. This has always been
ihr case following great wars. in
which wc always nave grca, imitation
critic 1ndict, Policy.
.I ,
,b.,, 90. .tch,.o,,
nori,,. roIIa',.,ae ~ nv. ''''. Us u pros
,ti,t.. my, 49,, ,',''',' % no
.,,.,,.;., ,i,
,.,,n, , 49,,
.,n a",, - '''''," W
d.nuttou no,icy -. ,u,,in.a
There seems TO he an moons gStency
and even "a contradiction between
these statements II Was during the
period of eighteen months Of pros
perity and busincsS activity to which
You aiiud" that the eXtraordinary cx-
ransion or imitation OF bank credit
TOOK place. until j, reached a danger.
"ue poin, beyond which i; could not
have gone much further wi,bou, :,
collapse !, was during his pcriod
Of VIVA, ,on .,l, ,ra.,,n,.,,, ,,,. ~,
,,rohr,,io, ',.,;,,
,i,.,,,.,I.. "''" p''
'''"'"''' "I"""''v, uf"d products OF
P'"'"- i"' nature. was stimulated
and competition i'm the purchase az
such commodities under IN. cultira;cl
belief that fhcy ,.a,,lL on .,ni r,b
,,,r, ''''' 90
'' ''S'"S prices re-
'"''lS more ana yet more credit
~ "'"h'' 'r"nSactions More
over this Sh6uid bc taken into nc
ttuNl' ana n Is an CNtr,,nSlv irnor,
ant factor in CONSIDERING business
.,iyiiv and no co,,,s. ~ &c
49,, o.ia1 p''''S during
VIM" YOU refer
Whht> Lowered Hcdi.count u,,c.
lyon ya,. ,,,, .,.
r.,,o,aa -. ""''SS conditions arc
'"''ukh towering Of the
ie"'Scouht rate TO- say. per cent ON
bonds aid y per cent on Agricultural
and commercial paper. through a r..
.ncwal of AGRICULTURAL ,oans r,,,u 800, q
ket can he or,p.a ,,,n 49, = '''"'
storcd ,,a ,,rl,,'. oo''ii"ch'e re-
,ons,o,, u NOR" liberal cx-
.. 'i'u''S' conditions viii
grow steadily worse
hohgs are being CONSTANTS re.
hn"ch' IN your state purticuIarly.
'her, mas been practically no Haul
dati"n for Year am wond.rinr
what you mean by more liberal ~
tension Of credits There arc ninety
nine member banks in South caro-
Una. ninety ono or which ar. nor
rowing from u CThc eight banks
which are not borrowing amour, To
a small sum in rcsourccs.j This BANK
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