The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-10-11

granting this aggregate increase or
! s53,000,000 (Which was small enough
in view of the urgent needs for
money and less than half the sum
the reserve system was lending to
each of several big speculative banks
in New York;, many banks which had
been previously accommodated were
| forced to pay up. These borrowing
banks in turn found IL necessary to
force their customers to sacrifice
their products while new loans were
being made here and there, ostenta-
tiously, to aid in the crop move
ment" Under these conditions the
Federal Reserve bank of Atlanta
reached the maximum amount of its
credit about the latter part of Octo-
Der. 1920, when it's total loans, dis
counts and bought paper were, as
above stated, reported at about $780,
600, 900.
Let it be remembered that the total
number of member banks in the At
ianta reserve district aggregate
nearly five hundred, and include the
great states of Georgia, Florida and
| Alabama, and parts of Mississippi
Louisiana and Tennessee.
1 ask your attention, Mr.. Editor. to
the highly suggestive fact that In
January, 1920. the Federal Reserve
bank of New York had sucked up and
was borrowing from other federal
reserve banks more money than the
Federal Reserve bank of Atlanta was
lending at that time to all of the 462
member banks in that entire district
also ask you to ncte that the Of
| fetal records show that in the au-
tumn of 1920 two big speculative in
| stitutions in New York city were bor-
rowing from the federal reserve sys-
tenn more money than the Federal
Reserve bank Of Atlanta was lending
/ to all of the 462 member banks in
that great agricultural district.
Warnings Were Issued
! The reserve banks and the reserve
board had announced and were car
rying out the policies of "deflation"
and contraction. Prices were tumb-
| ling, and farmers and business men
and the people generally, had become
| demoralized over the threatened ruin.
| Senators, Congressman, presidents OF
| farmers organizations and of bust
| ness associations in september and
/ October, 1920, were warning the fed
| eral reserve authorities that con-
| tinuation of their policies would
mean des II and destruction and were
pleading Tor change. In letter
| which Hon. John SHELTON Williams,
| a member of the reserve board and
| Comptroller OF the. Currency at that
1 time, wrote to Governor Harding OF
the federal reserve board on october
is, 1920, which / find printed in the
! hearings before the joint commission
on agricultural inquiry he said;
THE plans and policies which have
aided in bringing about detlation In
| the great staple commodities should
be at once taken up for considera-
/ At nG m
necessary to meet present and
changed conditions. If this is not
/ done speedily | am fearful of the con-
sequences which may ensue.
+ Three days later, on october Il,
! 1920, Mr.. Williams wrote a letter to
| the Secretary of the Treasury who
| was chairman of the federal reserve
| board (which was also read before
the Joint commission on agricultural
inquiry urging that the war finance
corporation should be re-established
In that same letter he also plead for
a relaxation of the boards deflation
| policies and said very plainly:
| The strain upon the business fab
| ric of the country is in sc me respects
| unparalleled and l do feel that the
1 time has come for the exercise OF
| such saMtary and constructive pow
| ers as may be at our command
| In the hearings before the same CON-
mission, Mr. Williams had read let
ter written by him to the governor
! of the federal reserve board in Jan
uary. 1926, in which he had made the
astounding disclosure that at the
close of December. 1919, the reserve
system was lending to one big spec
ulative institution in New York city
| IAN amount in excess OF the tCtal
loans and discounts made as OF De-
cember 26, 1919, to all OF their men,
Der banks by either the federal re-
serve banks of st. Louis, or Minne-
apolis or Kansas City, or Richmond,
or Atlanta, and about twice as much
as the aggregate loans and discounts
| and purchased paper held at that
| time by the federal reserve bank of
! Dallas"
| And Mr.. Williams, then member
| of the board, warned the reserve
board, had warned the reserve board
| in the same letter, that;
| This is a concentration of the
| funds of the reserve system with
one debtor bank, conspicuous for its
| speculative operations and promo
! tions, which. in my Judgment, is not
! only not justified but distinctly dan
gerous, and / feel it my duty to reg
| lister by strong dissent from con-
tinuance of such conditions as these
by writing you as l am doing. as an
| ex-officio member of the board"
now ask your attention to the
| official figures taken from the Fed
! eral Reserve Bulletin showing the
1 manner in which the Atlanta Reserve
| bank responded to the urgent and
| heartrending appeals which were be-
| ing made to 1t, and to the federal
reserve beard, for a relaxation of its
contraction policies and for the ex-
tension of additional credits.
The following figures show that to-
| tai of outstanding loans. discounts.
and bought paper Gncluding notes
re-discounted with other reserve
banks) purchased or discounted by
the Federal Reserve bank of Atlanta
| at the end of the last week In each
month from October, 1920. to January,
%. 1922.
Total loans di--~pnts and Thought
paper" of the fedefn reserve bank of
Atlanta at the end cf the last week of
each month Figures taken from official
reports of thejfederal reserve board):
Contraction In
credits as
From October. 1920, compared with
to January, 1872 October, 1920
4 n.to hnr n o