The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1921-09-15
DR.. I. +. LADD|'S
! WEEKLY LETTER

sse sflEEsE e -sss,
That the Federal Reserve System
offers very little aid to the farmers is
clearly shown by the testimony of
Governor Strong Of the New York
Federal Reserve Bank before the Joint
Commission Of Agriculture. Governor
Strong stated that he did not consider
farm paper good banking business.
The farmers turnover is usually from
nine to twelve months while the Fed
eral Reserve System does not encour-
age rediscounting in excess of six
months. It is true that Governor
Harding of the Federal Reserve Board
states that rediscounting has not been
denied when suitable paper was Of
fered, but the trouble has been that
the farmer could not offer suitable
paper, notwithstanding that he offers
land, livestock and growing crops.
The export and import business of
the United States is done largely thru
New York. Gold centraizes there.
Since over 35 per cent Of the total
Gold reserves is controlled by the Sec
ond District which is New York, the
remaining 65 per cent must be divided
among the other eleven Districts
which would each have less than 6 per
cent of the Gold Reserves held in the
Ssytem. The result is that when any
particular District approaches its linn
it Of credit then any further credit
to be extended the banks in it's District
must come through the Federal Re-
serve Board to the New York Federal
Reserve Bank to have their paper re-
discounted. This leaves very small
margin of profit to the Reserve Bank
desiring rediscount and would not en-
courage rediscounting to the farmers.
The result has been to force the
western banks to the big banking
houses Of Nav York for relief and
forced them to pay outrageous inter-
est rates which have stifled production
and wrung from the farmer unright-
eous bounty. The square deal" to the
farmer seems conspicuous for it's alb
sence.
The export and the import of the
country is the business that affects
the entire nation. New York acts as
the middleman and the GOLD or basis
Of credit lis held by the middleman
and he can control the source and sup
ply Of credit, thereby forcing the
products of the nation through his
hands and largely at his price.
At the close of business on June
20, 1921 the New York Reserve was:
80 times that of Dallas, 81 times
that Of Minneapolis, IL times that OF
Kansas City, 13 times that Of st.
Louis, ii times that of Richmond, II
times that of Atlanta.
Not only that, but the Reserve OF
the New York District was over twice
as much as that Of the combined dis
tricts Of Atlanta, Richmond, st. Lou-
is, Kansas City, Minneapolis and Dali
las, representing over half the total
area Of the United tSates. It is easy
to see from this comparison how the
agricultural interests have been made
to suffer.
J, The policy Of the government in re-
ducing the duty on flax seed and TO
greater extent on linseed Oil has re-
suited ia making it possible tor for
eign manufacturers to export oil TO
this country ut lower prices than the
farmers and linseed oil manufactur-
ers III the United States could pro
duce it. Foreign competition in Oil has,
therefore, not only been highly dis
asterous from the standpoint of the
producer 81 the oil but from the stand
point of ths grower Of the seed too.
Under the recent tariff policy the
production 81 flax seed il the United
States hAs been very materially ~
duced md II the policy of the past
few years u continued the United
States farmer will be compelled to
sell his seed Is foreign markets n
competition with that from Argentina
if my. II produced ,or nnors probably
the farmer viii be- forced q dtscola-
tinue the growing of flax sesd aaa =
ereat industxy no warpidly d theS
cline will bs 4ctced from the country
and We shall not only lost the advan-
ltage 81 flax as = crop but likewise
the great value o. HE linseed cale q
la iced for the. dairy and stock indus
txies. 81
On the other hand, by !, fair and
i TN s,nIsnr $nS,rnxx1 So flar 3yNllsaa
trFy Asl6 u,ay - built up j great ag'
Irieultu1nl jlpstry II tAes Mott Il
- s M o sci
~ I \ - = I y =! -! - = =