The Marietta journal. (Marietta, Ga.) 1918-1944, 1922-09-21

/
that Bankers losses, are greater promises Of
thigh" rates of interest, than low rates
The objection made by Mr.. Drake of the Nation
al Bank Of Griffin that small farmers do not nav
their notes at maturity, might also be applied to
other classes who borrow As all bankers have the
power and right to decline loans people that they
believe won't pay their notes when due. To reduce
the rate, won't compel Mr. Drake to make any loans
I to small farmers. His other objection that in
this period of easy money that its bad policy
to lend small farmers at SO as he will get habit
OF not IN future paying more than 60, is also with
IN his individual power to control, if the Federal
Reserve Board does reduce the rate of interest they
can compel Mr. Drake to aid the farmer in getting
a 6@o habit. The men operating Banks are charged
with the duty of the welfare of the people, in the
safety and Soundness of all Commercial trasactions
in their community, and they can be successful in
this particular just well at Glow rate of in
terest, will with "high" rate of interest It
can't be an arguement worthy of consideration by
the Federal Reserve Board for Banker to saw that
any class of people will pay their notes more
promptly at high" rate of interest than at
! low rate of interest
am willing to admit that the Banks own all
| the money that the Government has or will create
but it is lawful fact, that a Bank is Public Ser
| vice Corporation, through which the Government
distributes money, and credit, for the use TO all
the people. The Bank is factory that manufac-
lures credits it is possible for Bank to utilize
100000 of deposits and book fabricate this amount
into million dollars of SIX eight or ten per cent
notes. This system Of expansion of the dollar is
essential to make our currency "eastic'' for the
needs of commerce.
Any financial system however, that has the
power to expand, also has the power to contract
Our Federal Reserve Banking System did expand
IN time Of need, of and commerce. It's power
to contract and produce healthy liquidation has been
on trial since 1920 Previous to the war the cred
it and capital of Europe aided in marketing
our products. The destroyed the credit of
Europe, and transferred its capital to this
country thus causing VIOLENT change in all com
merce making it necessary for the producer to f.
nance the consumer and abrupt, directly opposite
change III orderly distribution of products This
was recognized by Banking interests and in
their earnest endeavor to restore order in com
merce. They formed and contributed funds to SYN
dlcates and export corporations to enable them to
| credit the consumer of Europe. Their patriot
ism was soundf but they failed to stabilize the pro-
Queer" The foundation was left to rot They only
furnished the shingles for the roof They furnished
the cotton exporter with %credit and money to
buy from the farmer cotton at Zoe pound that cost
the farmer 4Oc pound to purchase But it left the
farmer without cent to buy cotton shirt and with
a surplus of debt to merchant and bank Its almost
daily practice with New York Banks holding va
rlous stocks, as loan collateras that when bear
RAID IS destroying the value of their collateral to
get together and support the market value on this
or that stock. Ii the banking interests had gotten
together IN 1920 and supported the value of their
collateral cotton they could have marketed the crop
at a price to pay the debts of the farmer and the
merchant and have saved this country from insOl
vency. The banks cannot hope to collect the notes
due them today unless the farmer gets profitable
price for his crops, and | contend that if furnishing
money to the little and big farmer free of any inter
est (much less 6%) will restore the debt paying
power of the farmer it will be the best investment
the banks made for the Solvency of themselves
and the state.
Money is fate product Of the Government it
beng required by commerce of organized peoples
its systems of distribution for the use of the people
differs IN several nations. Our government prints
their money and gives the free use of it to the Fede
raj Reserve Banks who IN turn supplies the member
Banks on adequate security part free and bal
ance with varying interest charges, through these
Banks individuals secure its All this money in
Ievlably will return to its source the Federal Re-
serve Banks) in a varying period of years In in
terest payments alone, much sooner in booming
periods of business high wages and high prices This
is the real cause of contraction and actually oc
Cured to us in 1920, without any Federal Reserve
Board malicious act to bring it about The system
automatically expands" and contracts
The change in commerce due to our transfer
of capital to this country and obligation on the pro
Iducer to finance the consumer, mpes this country
to supplement its financial system so as to furnish the
use OF the instrument Of commerce. ''monev and
Icredlt to the farmer. Custom and regulation has
separated HIM from marketing his own products
Through the use of bank credit Today with cot
ton as collateral he only get 'call' loan and
us closed out declining market In 1914 the farm