The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1921-12-25
.. nAscoM ~ T1MMoNs.

g.,i.. Washington Correspondent.
nSSIiINGTON- W hat part will
NHsadoral reserve sytem play In
E Congressional election next
W and iu the presidential sweep
s.se az. :" question that Washing
~ discussing right now. There
wnd doult that the federal reserve
I'm .o mas come in for criticism
e' one end of the country to the
pg| pnr II has been charged that the
eSsroi reserve board engaged in
Eo,t deflation and had large
~, in causing the catastrophe
EsIeb overlook the country and
sH ,, which Il is slowly, y,-many
,s1nk lmparceptibly, y,--recovering.
Tbere is one school Of thought
J.. WASHINGTON which believes that
,so 1922 elections will be fought
W., in tho issues of disarmament,
,ss ouadruple alliance OF the four
,raat military powers OF the world,
snl the world issues.
Reserve System an Issue?
'tpothtr school, and "a larger one,
i9ayes that domestic issues--taXCs
30 and the administration OF the
soIaral reserve system, will be the
e,srshadowing issue, with the world
cnesilors playing the minor part.
NThai he federal reserve board
.,af realizes that it's deflation and
s,ber po.icles will very likely be an
,s.pe i'm the next election was shown
fv the speech of Governor w, p. O..
jiardine Of the board before the
Washington chamber of commerce
here, recently.
n Is now generally admitted that
,be federal reserve system basicaily
d sound. The thing that is eX-
sscted tn prove an issue in the next
slsction is not the system itself,
but the manner of its administra-
ton, -, -.
here talked in a manner showing
mat he Is fully acquainted with the
eomplalnts that have been registered
throughout the country" He also
srade It plain that he was perfectly
willing to shift back to national
hanks some of the blame that has
been heaped on the federal reserve
board
"Banks, as a rule, do not like to
admit to customers that they are
short of loanable funds nor do they
wish to arouse enmity in declining
10 make loans or in asking fer a
reduction Of loan already made, "
Governor Harding said.
There are some bank officers
who are able frankly TO decline nm
application for loan in way
which leaves no sting. but which on
the contrary gives the applicant
me impression that the rejection Of
bis application is a favor to him.
But not all bank officers have such
tact. Some are frank enough but
their bluntness hurts the feelings of
the would be borrower. 1t is not
unusual for bank officers in de-
cllning loans to look for "A buffer,
Or some one TO whom they can
pass the buck" In the old days,
the board of directors was made
useful in this capacity.
The Bankers Modern View.
Nowadays. however, bank officers
find in the federal reserve board
or the federal reserve bank a much
more satisfactory buffer than IA
local board of directors, In many
ases in agricultural sections parti-
culary, banks have found II very
convenient to pass the buck" 70
the federal resarve bank or the
federal reserve board, and have
stated to borrower or a would-be
borrower that they would like to
grant the extension asked for or
make the loan desired, but the
federal reserve would not permit It.
Such a procedure has a tendency 10
relieve the situation as far as the
local bank is concerned but it is
certainly unfair TO the feredal
reserve system. This evasion of
responsibility has subjected the
federal reserve banks to great
amount OF unjust criticism and has
given the public a wrong impression
u the authority and attitude of the
federal reserve banks and the fed
erai reserve board. 1t had aroused
Indignation which is entirely natura.
IN the circumstances and has
caused much correspondence with
the federal reserve board direct ano
with congressman and United States
ssnators, whose ire has been aroused
because OF these alleged arbitrary
Tsthods
1T is entirely true that a fedora
rArye bank, mindful Of it's res
bnslhllity under the law and actinl
u accordance with the dictates oI
ordinary banking prudence, may
lave had occasion to call the at
hntion of some of it's larger Dor
towing banks to their large dis
count lines, which have run II
y some cases over a period of year,
WNnhout being reduced, and have
Sahed the attention of the borrowin.
ranks TO the necessity of work
hg themselves into a stronger posi-
son' But in no case within tn
knowledge of the federal reserve
pOafd has any federal reserve ~nl
ahdertaken TO say TO a member
uAnk what particular loans !
Mould call or ask to have reduced
A Concrete Example.
Will give you a concrete eN
ample In a southern state. therl
national bank which has for
mhg time been a large and con
snaous borrower at the fedora
NySeFVe bank, the amount of il
NNiscounts being several time
sitater than it's capital stock an
S ialr proportion of the loanabl
,uhds Of the reserve bank. 1t seem
Nh this bank made frequen
toihlses to reduce it's discount lin
~ more reasonable sum, but a
collected notes II would constant
'aehd In others for rediscount.
mere is a notice that this banl
spears 20 have been sending {
syae OF its borrowing customers
".sh reads as follows:
-FOUR note for S..... falls du
o,aa..'.... Our federal reserve ban
"as this note. having rediscounte
lor us, As it has been renewe
nnelal times they are INSISTING
~ A PAYMENT OF 5 O.. or more