The Llano colonist. [volume] (Llano, Calif.) 191?-1937, 1922-12-02
THE FEDERAL RESERVE VAMPIRE
fBY The Federated Pressl


The strangest thing that has happen
ed in these strange times in our coun-
try, at least, is the suppression of the
federal reserve scandal.
Here is story that few years ago
would have set the country on its toes
with excitement. Compared with it in
actual Importance to the average citi-
zen no other development seems worth
boot. Yet of this, scarcely print
ed word or a hint anywhere.
Meantime, the scandal goes on and.
gets worse daily and there are times
when it looks as if it might grow enuf
some day to topple over of its own,
weight and startle the nation with
disaster to make cur eyes bulge.
Meantime, also, the prevailing ST
lence about it is costing the farmers of
the country literally billions of dollars.
year.
Ghe whole agricultural region west
of the Mississippi river is stricken with
monstrous blight of poverty and
threatened with something like ruin be-
cause of the deliberate policy of the
federal reserve board. The farmers,
know it. Some of their representatives
in congress denounce it. The big
press of the country will not say a
word about it.
AT the end of May, 1920, the re-
serve board suddenly undertook to-
force swift return to pre-war condi-
tons by debating credits. That is.
to say, it raised the discount rate, over
which it has tyrannical and absolute
control.
In the next IA months, as result
of this action, the price of corn at Chi
cago had dropped from $l.47 to S.
cents, of No. 2 red wheat from $2.97
to $l.23. of cattle from $1,000 S.
II, of hogs from $l4.75 to 5000.
They have continued to drop most
of the time since.
Meanwhile. the prices of bonds had
risen. Most Of the war issues of gov
eminent bonds rose 10 or II points to
par or near it. Railroad and industrial
bonds scared. Fortunate were the per-
sons that had invested in these securi--
ties! They reaped a rich harvest.
But the small retailer was hit almost
as hard as the farmer. The number of
business failures in 1921 was the Iarg-
est ever known in our history. While
the kept press was yelling it head off
about prosperity there were six times
as many failures as there had been in
1917 and three times as many as in
the famous panic year of 1907.
Against protests and warning by dis
interested experts, the board continued
its fatal policy In II months ending
in October, 1921, it had debated cred
its by nearly $2.O00,OO0,OOO, being.
more than half of the credits it had
out, and it had contracted the circula-:
ting medium of the country by with
drawing nearly $l,000,OO0,OOO of fed
eral reserve notes.
The resulting calamities to the west
tern farmers are appalling. In many
regions the courts are clogged with the
bankruptcy proceedings of ruined far
mers. In some places the schools are.
closed because farmers cannot nav the.
taxes to keep them open.
Yet there has been no decline in the
cost OF living corresponding to the. de-
cline in prices on the farm. Wheat is
down more than one-half, but bread is
about the same. Cattle are SO cheap,
It hardly pays to raise them, but prices.
at the market show little decline.
Meanwhile the board has been vast.
ing millions of dollars in the building
of magnificent banking palaces. Ii has
recklessly and profuseIy increased the
salaries of many of its people. 1t has
been accused of the grossest favorit-
ism IN making loans. 1t has been ac-
cused of exacting intolerable and OBJ
pressive rates from other institutions,
even to lending money at the rate of
81 percent year.
And over all these conditions the
veil of secrecy is drawn.
Why2