The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1922-04-20

else. The great majority Of business
that has been conducted since the In
a~urguration Of the Federal Reserve
System has not been done with money
but has been done with bank credit.
The big bankers have been able to
easily. fool the people in making a
distinction between the two. Very
few men who created debts and made
bank loans during the war actually
borrowed money. They paid interest
just the same, but the banker did not
actually loan them money. When we
pick up the papers and read the vari-
Gus bank statements and look at the
statement of deposits, that does not
mean that those deposits represent
cash. They d. 1not. To a large extent
they represent credit.
Let me Illustrates: Mr.. A. walks
into a bank and says to the cashier. II
wish to borrow $4,000, here is my
note properly Endorsed and it is such
a note as comes within the provisions
of the Federal Reserve Act" The
cashier says to Mr.. A, "Well, Mr.. A.,
do you wish this in cash or do you
simply wish a checking account ?"
Mr.. A. replies that he simply wants
the note discounted and placed to his
credit on his checking account. The
loan is granted. The note is discounted
Mr.. A is credited on the books with
the amount and he pays his bills by
check. His checks are deposited by
his payees in their various banks
who are engaged in the same kind of
loan transactions. These checks are
then passed through the clearing
house and there washed out" by
matching, or checking, them against
each other and the banks adjusting
their differences in cash. The banks
have not loaned money. They have
simply loaned a book transaction,
credit, and are drawing interest on
their system of bookkeeping. 1t is
hardly probable that more than S per
centum of cash is required to adjust
the differences of the banks in the
Tearing house association. An in
terest bearing debt has been created
solely OF the ability of the banks to
keep books, coupled with an unjust
privilege allowed them under the
provisions of the Federal Reserve Act
which permits them to extend or con-
tract such credit almost at will. 1t
has been the arbitrary excerise of this
sovereign function placed in the hands
of private bankers, that has wrought
S o much havoc during the past several
months!
The Federal Reserve System Arrives
In August, 1913, we were assured
by n of the proponents of the Fed
eral Reserve Act, that the Act would
prevent unfair and undue constric-
ton of credits with it's consequent
paralyzing effect on business and on
the productive energies of the nation"
Also
Men will not be thrown out of en-
ployment wholesale throughout the
country by the fright of financial and
commercial panic, but finance and
commerce will be steady Men will net
be ruined by violent and abrupt
changes of values. Hundreds Of thou
s,:nd of men Will not suddenly Re
thoWn u Of employment during
these natl onal waves of depression.
There will oe no national waves of
depression nor unc le teveris'l buoy
ancy."
The above ia cments were made by
Senator L. Owe. and appee ed in an
article entitled The Banking a.t
Currency Bill" in the Commoner,
August, 1923, Vol. Is, No. %, page 4.
Senator Owen is a most brilliant
man and had given a great deal of
time and thought to his subject, but
how easily was he fooled. 1t is true
We have had no bankers panic but we
have had one of the greatest panics
among the people that we have ever
witnessed. What an era of unfair
and undue construction of credits"
have we had and we have fully realiz-
ed. its consequent paralyzing effect
on business and on the productive
energies of the nation" Men have been
thrown out Unemployment, not by the