Macon beacon. [volume] (Macon, Miss.) 1859-1995, 1922-01-20

Federal Reserve system and all 9th,
capital could not be successfully en-
ployed in business if there was n,
arr treatment Of agriculture.
The ramiications of this subiet
IRE so great, they extend so far, ths
t is Impossible fully to explain tn
natter IN a short statement. For II
'tance, everyone will appreciate tina
is fundamentally Decessar
for the best interest of the 90,
ton grower that funds be loaned O
oaled cotton cloth in New Englan
warehouses, and that IT is just as es
sential to the general welfare +
market cotton cloth in an orderl,
manner as it is to market raw cotton
Ihis is one Of the most effectiv
means Of supporting cotton growing
II being s~elf-evident that cotton clotl
u have value if the raw materia
snail be valuable, But such loans an.
pear IN statistics as industrial loans
tnough anyone can see the true rela.
ton.
II n would 90 into all the de-.
tails, 1t would be shown that agri-
culture has not been neglected. bnt
10 the contrary, has been greatly
favored throughout, preferentially,
SO.
ferhaps a concrete example would
not ne out OF place, Our bank bor-
rowed at n time during the last cot
Ton season, $350,0O0 from the New
orleans branch of the Federal Re-
serve Bank, all Of which was for tho
purpose of carrying cotton.
y'sd 1 W AHA lSar Est part Of this mon
receipts to New Orleans II frr,re NJ
loan; to the contrary, we used COM
merciai paper and kept the ware
mousse receipts in our possession. in
order that the owners of the cotton
might be in position to sell them ~
VIII, without delay. Therefore. wb;Io
all of this $350,OOO loan was for apri-
cultural purposes, il did not 50 an
pear on the records of the Federal
Reserve Bank.
Tells of Earnings,
f., rms practice is general, and thera
nave been thousands of such transoc-
throughout the South and West
The statistical position Of such loans Is
merely that Of a transactions between
banks. All bank loans in the Sontb
except a small percentage, are predi,
Gated, directly or indirectly, on agrj-
culture, though only a small fraction
81 them may be so reported statistical ,
ly.
The other statement of the worthy
FORMER governor Of Arkansas is tbat
Ihe profits of the system in New York
ZIG per cent, and outside of New
1ork over 100 percent. True. These
earnings are to the credit of the in
situations. But Governor Brough did
not tell what is done with these earn
ngs.
All earnings of a Federal Reserve
above 6 per cent are required
% be paid into the United States
.reasury as a franchise tax. There
ore, the American people receive all
ne balance. If a Federal Reserve
sank earned so much as 300 per cent
VA per cent of this amount
would be paid back to all The
'eople through the United States
reashry. Such of the earn
.gs of the Federal Reserve Banks
$ they have been required by law
0 hold as surplus, are controlled bv
ne government and cannot be paid
the shareholders, as their dividends ]
limited to 6 per cent. The large !
arnings of the Federal Reserve Banks
be accounted for by the fact that I
lember banks are required to carry
'rge deposits with them. as reserves. I
pom which no interest is paid, thew !
ay no interest upon capital stock, do v
OF advertise and are shielded i'm MANY S
avs from expenses that are com
to commercial banking. +
Governor Brough speaks highly of a
le value Of the Federal Reserve svs-
rm, and | do not want to p
'nvey the impression that he con- I
'mned the system. He expressed &
mself generally as believing that it Il
as the greatest fundamentally for
that this government or any
her government had ever
not want to appear as INDUCING
any criticism of Governor Brough.
native Mississippan, who, as we
gret, saw fit to cast his lot in an 0
her state. His patriotism ard great y
Iblic service are so outstanding all
alize he is one of the great men
the South.