The Marietta journal. (Marietta, Ga.) 1918-1944, 1922-08-31

groundless as necessity alone creates loans and
a man borrows readily when necessity exists
at high" rates when it is cheap, and the indv-
ldual good banker can control and does limit loans
within the value of security It's my observation
that Bankers losses, are greater promises of
high rates of interest, than on low" rates
The objection made by Mr.. Drake of the Nation
al Bank of Griffin that small farmers do not pay
their notes at maturity, might also be applied to
other classes who borrow AS all bankers have the
power and right to decline loans to people that thew
believe Wont pay their notes when due. To reduce
the rate, won't compel Mr.. Drake to make any loans
to small farmers. His other objection that in
this period of easy money" that its bad policy
to lend small farmers at sc he will get habit
of not in future paying more than &C. is also with
III his individual power to control if the Federal
Reserve Board does reduce the rate of interest thew
can compel Mr. Drake to aid the farmer in getting
Ia 6fo habit. The men operating Banks are charged
with the duty Of the welfare of the people in the
safety and soundness of all Commercial trasactions
IN their community and they can be successful in
this particular just well at Cow rate of in
terest as well as with high" rate of interest 1t
can't be an arguement worthy of consideration by
the Federal Reserve Board for Banker to say that
any class of people will pay their notes more
promptly at high rate of interest than at a
| low" rate of interest.
| am willing to admit that the Banks own all
the money that the Government has or will create
but it is a lawful fact, that Bank is Public Ser
vice Corporation through which the Government
distributes money, and credit for the use of all
the people The Bank is factory, that manufac-
lures credits it is possible for Bnk to utilize
100000 of deposits, and book fabricate this amount
into million dollars of six eight or ten per cent
notes This system of expansion of the dollar is
essential to make currency "elastic'', for the
needs of commerce.
Any financial system however, that has the
power to expand also has the power to contract
Our Federal Reserve Banking System did expand
IN time of need, of and commerce It's power
to contract and produce healthy liquidation has been
on trial since 1920 Previous to the war; the ''cred-
our products. The destroyed the Credit of
Europe and transferred it's 'capital'' to this
country, thus causing VIOLENT change in all com
merce making it necessary for the producer to f.
nance the consumer, an abrupt, directly opposite
Ichange in orderly distribution of products This
was recognized by our Banking interests and in
their easnest endeavOr to restore order in COM
merce. They formed and contributed funds to syn
dlcateS and export corporations to enable them to
| credit the consumer of Europe. Their patriot
ism was sound but they failed to stabilize the pro-
Queer" The foundation was left to rot They only
furnished the shingles for the roof They furnished
the cotton exporter with ''credit" and money to
buy from the farmer cotton at 10c pound that cost
the farmer Ace pound to purchase But it left the
farmer without cent to buy cotton shirt and with
a surplus of debt to merchant and bank It's almost
a daily practice with New York Banks holding va
rlOuS stocks loan collaterals that when bear
raid IS destroying the value of their collateral to
Iget together and support the market value on this
or that stock. If the banking interests had gotten
together in 1920 they could have marketed the crop
at price to pay the debts of the farmer and the
merchant and have saved this country from insol-
yency. The banks cannot hope to collect the notes
due them today unless the farmer gets profitable
prce for his crops and contend that if furnishing
money to the little and big farmer free of any inter
est (much less 90 will restore the debt paving
power Of the farmer, 1t will be the best investment
the banks made for the SOlvency of thems elves
land the state
Money is fiat product of the Government if
beng required by commerce of organized peoples.
It's systems OF distribution for the use of the people
ldltfers In several nations Our government prints
the money and gives the free use of it to the Fede-
raj Reserve Banks who in turn supplies the member
Banks on adequate security part free and bal
lance with varying interest charges through these
Banks individuals secure it's use All this money in
Ievitaby will return to its source (the Federal Re-
serve Banks in varying period of years. In in
terest payments alone, much sooner in booming
periods of business high wages and high prices This
is the real acuse of contraction and actually oc
Cured to us in 1920 without any ederal Reserve
Board malicious act to bring it about The system
automatically expands" and 'contracts'
/ The change IN commerce due to Othe transfer of
capta to this country and the obligation on the pro
!ducer to nance the consumer, impels this country
TO supplement It's financial system as to furnish the
use or the instrument of commerce" money and
Icredt to the farmer. Custom and regulation has
separated him fro mmarketing his own products
through the use of bank credit" Today with cot