The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-09-26

uuHicaIlon TO Inc ASe-derald, MT. e. -. 1oI-
ter of Dothan stated:
The whole truth is that the federal
tenn created to prevent panics created the greatest
panic known in this country. and toad Of
there being a minimum OF failures 90 per cent of
the farmers of the south and broke. They
don't show in Bradstreet's Duns. and therefore
you have not taken them in account 1t
their innocent heads that the full force of Hard
ing's wild orgy Of defation fell.
Defation decided almost overnight Loans
member banks in the south and west
stopped. Outstanding loans we're called. The agri-
cultural banks called their customers and the first
call of the federal satisfied. Every
few days the federal would issue another
call always in the south and west, and the widest
confusion reigned The country banks help
less and could do nothing but call their agricultural
Cotton tumbed from 40 cents to 10
cents, hogs from 20 cents to cents, syrup from
81 gallon to 10 cents gallon. wheat from So
to 90 cents peanuts from $500 per ton to s35 per
ton; corn. then selling 81 per bushel lost its
value entirely and consumed fuel by the
grower. And still the federal called. 1t
then that young mules which cost $500 each
eight months before led in and delivered at
$50 each. and good milk freely sold at
$3.50 each, all to satisfy the blind. branless and
cruel call of the Federal Reserve bank. Still it
called again. This time dug the Liberty
bonds which bought patriots and sold them
at 80 cents the dollar-obigatons of
governmhent, sold a discount Of 20 per cent and
to satisfy the demands of the same government
Can you think of anything, Mr.. Editor, that could
be oppressive2 During all this time of de-
flation and the first and only time since this
government founded. of south Alabama could
not borrow SIS bank note bale of cotton
Liberty bond-the governments obligation
not even from member bank Of the federal re-
system. When it all agriculture in
the south and bankrupt.
Mr.. M. B. Weborn, governor Of the fed
eral reserve bank Of Atlanta, wrote an ar
tcle for "The 6-F Journal" in which the
charges made by Mr.. Porter, Senator Heflin
and others who have assaulted the federal re-
serve banks are completely refuted. Mr. Well
borns business integrity, established by many
years of successful banking in Alabama, and
the additional fact that he has been at the
head of the Atlanta Federal Reserve bank
ever since it established, seven and one
half years ago, gives the weight of authority
ments on heresay, but accurate knowledge.
Mr. Wellborn's article on Agricultural
Credits" is too long to be quoted in full, but
The Age-Herald will give some excerpts
which ought to convince the farmers and
other skeptics, that their misfortunes were aot
due to the federal reserve system. Everyone
an era Of extravaganza in this country never
before equaled. Just as Mr.. Wellborn says:
"The public press teemed with editorials, urg-
ing the public to be less extravagant, but this
good advice fell upon deaf ears" Supply was
not equal to an abnormal demand and prices
scared. A crash was inevitable. Tne fed
eral reserve board knew what was coming and
issued repeated warnings. Member banks were
advised to be careful in extending further
credits, as the reserves in regional banks were
declining daily, except to provide for the actual
did not want any more loans made to buy lux
uries. Mr.. Wellborn says these efforts were
the basis of the charges that the federal re-
serve system had deliberately advocated de-
flation policy. $50 far the farmers were
concerned, we at no time denied them credit"
Explaining why, in some parts Of the country
there was lack Of credit for the farmers, Mr.
Wellborn says:
The subject Of agricultural CREDITS has been Of
paramount interest to the public for the past
twelve months. and discussion has taken a wide
range. 1 admit that there has been lack of
credits in parts of our agricultural sections
but ready explanation of this is to be found in the
fact that most of the banks which these
munities are state institutions and non-members of
the federal system although they have been
repeatedly urged during the past seven years to
Join the system, availng themselves of the
privileges which membership affords, and placing
themselves In . position to be Of better service
their communities. Forty-two per cent of the
souths banking power rests in the state banks; and
II these institutions had fit to ally them
selves with the federal reserve. would by the
expansion of federal notes. based upon their
reserves with us. have been in stronger position
help the and agricultural interests of this
district. In the Sixth federal district
during the period Of which i speak. there
1872 state banks eligible for membership In the
system--that is, having q capital Of $4,000
nore-and.. Of this number. only 81 fit
become members OF the system While few Of
these institutions in, the vast majority
stayed out; and, therefore, when the inevitable
crash In 1920. they powerless to
help the situation . greater degree than they did
because they members Of great fnan-
cial system-a system created by Congress for
the purpose of dispensing its accommodations to
state banks well national banks. and for the
benefit of the people in this great land Of ours
A quotation from the report Of the Joint