The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1922-10-30
THE PRESIDENT ON DEFLATIoN

been directed to arrest the too rapid
def1ation which had set in, and to
this end there has been a progress
siye reduction, of the Federal Re-
serve discount rate. AS result OF
these policies, liberty bonds have
progressively risen in value. The gen.
eral financial situation has steadily
improved, and today the country
has a brighter prospect ahead of its
business, industry and agriculture
than at any time since the mistaken
program of drastic deflation adopt
ed by those who'were then in control
Of Government policies. Extract
from President Harding's letter to
Congressman Mondell.
Printing this, and commenting on
it, the Baltimore Manufacturers
Record has this,
"a more vigorous statement a.
gainst the drastic deflation, Of the
Federal Reserve management has
hardly been put forth by any one
than this by President Harding. Here
is confirmation of everything which
the Manufacturers Record has said
on the subject. Though couched in
polite language, it is an emphatic re-
nunciation of "those who were then
in control of Government policies" l"
In the light of this statement from
President Harding there is no Won
der that the same issue of the daily
papers which published it carried a
dispatch from Washington to the
effect that Mr.. W. P. G. Harding's
chances for reappointment ,as Gov
ernor of the, Federal Reserve Board
have gone aglimmering. This dispatch
says: Senatorial opposition to W.
P. G.. Harding, former Governor Of
the Federal Reserve Board is believ-
ed by close friends Of the President
to have removed virtually all chanc-
es Of his reappointment."
president Harding could not pos
sibly reappoint Governor Harding
without stultifying himself after the
vigorous denunciation he has made
of the "too rapid defation" brought
about by those who were in charge of
the Federal Reserve System. The
progressive reduction of>the Federal
Reserve discount rate to which Pres
ident Harding refers inevitably
brought about a rise in the price
Of Government bonds, as the Manu-
facturers Record over and over a.
gsif said would be the case if the
discount rate should be reduced, but
tho discount rate was maintained by
the Federal Reserve oard until bill
lions of these bonds had been forced
out of the hands of honest holders
who were compelled to realize on
them, and until these billions Of
bonds had been bought in at Is to
20 per cent below their face value
by those who had the money available
or who had credit with Federal Re-
serve banks. Hundred of millions of
dollars were made by the people who
were favored by the breaking down
of Government bonds through the
action of the Federal Reserve Sys-
tenn, to the loss of honest holders.
"But Government bonds are only
one feature of the loss brought on
by deflation. More than $30,000,0 1000
900 worth of value was wiped out of
farm and mine and factory products
and securities by the same drastic
policy, which we'll nigh bankrupted
the universe. President Harding may
we'll take credit for having brought
about a change from drastic def1a-
ton, which was heading the nation
to ruin, but even in this he might
have moved little more rapidly
than he did, despite the tremendous
power of the big financial interests
to prevent any action until they
were ready to reverse the policy
They are still fighting for the re-
nomination Of W. P. G. Harding
but President Harding has now made
it impossible for him, after his de-
nunciation of this drastic defiatior
under Governor Harding, to renomi