, 1922-09-29
Do6ging Their Record

IT is APPARENT. as the congressional cam
L paign warns up that Democratic speakers and
Democratic publicity mediums are prepared TO he.
sort to misrepresentation Of we'll established facts
in an endeavor to disavow responsibility for poll
.cies which prevailed under the Wilson administers
tion. The latest evidence of this is furnished in the
Democratic denial that the policy of restriction Of
credits and general deflation which brought ruin
10 the agricultural interests should be charged to
restriction and deflation and their In
furious effects is so plain that it's attempted re-
'pudiation indicates that Democratic leaders are
in a desperate situation.
The Federal Reserve hank inaugurated the policy
of dcflation in December, 1919. by starting an in.
crease in interest rates in order TO force a curtail.
ment Of loans. 1t folio. cd this up in January,
1920, by notifying member banks that they must
radically curtail their loans. BY February. this
policy had so injuriously affected the farming in.
tercsts that the late Senator Gronna. OF North Da.
kota. the chairman Of the senate committee on apri-
culture, ON February 2, 1920, introduced the follow
ing resolution =
Resolved. That the senate instruct the commit,
tee on banking and currency to investigate and re-
port 10 the senate the amount of loans made upon
grain by the Federal Reserve and other banks. and
10 investigate the alleged cause of withdrawal Of
funds 10 provide for loans and extensions or re.
.newal of loans upon wheat and other cereals
On May Is. 1921. Senator Mccormick. of Illinois.
introduced a resolution asking that the Federal
Reserve board advise the senate what ii had done
in the way of restriction of credits and what furth-
.er steps it proposes to take or recommend 10 mob
ilize credits in order to move the 1920 CROP Or
May p metropolitan newspapers carried an extract
from n letter which Governor W p. G. Harding. OF
the federal reserve system. wrote Senator McCor-
mick relative 10 :Se resolution introduced MAY 15.
The letter was not printed in its entirety but this
excerpt from it was printed in NewaN ork papers,
Discount rate advances have checked credit
transaction somewhat. but have not been entirely
effective in bringing about the reduction in loans
desired and which might normally have been cx-
pccted during the early months Of this year"
On June 3, 1920. Representative Garner. Eemo.
crat, of Texas, ranking member OF the house ways
and means committee. wrote a letter 10 the federal
reserve board protesting against its policy of re.
%striction of agricultural credits, which. he stated.
would result most disastrously to the wool inter
.csts of his state. Until recently there has been no
deny that the action of the federal reserve boar d in
May. 1920, was what brought ruin 10 the agricul.
tural and livestock interests Of the United States.
On june Q, 1921. Senator Simmons. Democratic
leader and ranking member Of the senate finance
committee, while discussing the bill to increase
the funds of the federal farm loan banks. said:
81 have no hesitation in saying that the narrow
policy of the federal reserve board with respect to
agriculture and agricultural loans. in the matter
OF deflation and in the matter of restriction of
credit at the wrong time. and going too far in both
directions. coupled with the fact of their taking the
lid practically off the interest rate charged by the
federal reserve board, is largely responsible for The
condition in which the farmer finds himself todavr
Throughout the Wilson administration the fed.
eral reserve board was completely dominated bv
Democrats. The Democratic secretary of treasury
was chairman. The Democratic comptroller OF the
currency was q member. All other members of that
board with one exception, were Democrats.