Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1921-08-05
STORM SCENES
CONTINUE IN
BANK HEARING
Says Legal Limitations
Governed Policy Of
Credit at All Times.
Funk Declares He Is
Surprised That System
Was Ever Questioned.

Washington. Aug. 4.-Credit poll
cies of the federal reserve system
continued under examination of a CON
gressional commission Thursday in a
continuously stormy atmosphere, with
Governor Harding of the reserve
board as the sole witness.
The federal reserve board did not
create this financial depression" Gov
ernor Harding explained. II saw it
coming, and got ready to protect
things, and people ought to be CRATE
full l did SO. Now. all we need is
cessation of pessimism, which marks
bad times as foolish optimism marks
good times. We all know now every
body was going crazy in the boom dur
ing the fall of 1919.
This situation is going to work
out. There is no comparison between
the condition year ago and condi-
tions today. Take cotton with q low
yield, and exports picking up. Banks
everywhere are fully justified now in
carving loans.
"All we've got to do is to get out
OF everlasting pessimism, and quit
saving everything is going to the dogs.
Why, man has to put up a good
cheerful face if he wants credit. You
can't talk to the banker like you do
W lue LAX dSSeSSOr.
Previously a sharp passage had
taken place IN which Representative
Funk. Republican. Illinois; Represent
ative Mills, Republican. New York; and
later, Governor Harding, participated.
I'm keenly disappointed" Repre-
sentative Funk said, because the re-
serve system has been challenged
complained Of criticized and charged
On one ground, that it has discrim-
mated against agriculture. And we've
not heard one word from this wit
ness
Representative Mills leaped into the
fray, saying the commission had cal
lowed John Shelton Williams, former
of the currency, during
two days. to make charge after charge
against the reserve board" and that
Governor Harding was entitled to
common justice" in the privilege of a
detailed response.
Mr.. Funk told Mr.. Mills to "handle
your affairs, and I'll handle mine.''
while Chairman Anderson ruled that
the governor was within his rights.
HAS the reserve board called in
farm credits 50" Mr.. Funk demanded
later
"No. sir. it never has" Governor
Harding retorted.
How about the circulars Of the
San Francisco reserve bank?" Mr..
Funk continued concerning the price
Of wheat in 192O?"
Il never heard that before" Gov
arnor Harding said. ''Did it cause
break in wheat prices
ut had some effect" Mr.. Funk re-
sponded.
''The board has cautioned reserve
banks not to issue circulars" Gov
,rnor Harding continued TITS the
ob of banker to look to the value
# his collateral. but to do it in
lmet way. It is not the function Of
he reserve system to regulate prices,
In general. Mr.. Harding said. ~the
ttitude Of the reserve board toward
griculture has been greatly misun-
erstood and grossly misrepresented
"The whole trouble with the reserve
ystem III meeting agriculture de-
hands is that reserve banks do not
nd cannot lend to Individual Dor
OVERS" he added
1.-The paper of borrowers must get
nto the hands of member banks be-
ore it goes to the system"
Giving the history of increases OF
e-discount rates in 1919 and 1870.
Iovennor Harding asserted that Mr..
Williams. one of its chief critics, had
anticipated in the rulings. The ideal
ystem, he said, would be to maintain
e-discount rates just above market
ates on money. thus avoiding infla-
on. and vet offering practically un-
mited credit
Legal limitations, he held. governed
le board at all times and the mat
y of credit policies ought apd did
,nter upon l. district reserve banks.