The Chickasha daily express. (Chickasha, Indian Territory [Okla.]) 1899-current, 1922-02-07
DEFLATiON-WH0 WAS TO BLAME?

Either their knowledge and understanding of econ
and financial problems limited because of their desire
play the popular game OF finding the goat quarters where
they make political capital OF IT, several have been
trying hold the Federal Reserve Board responsible for della
on with all its disastrous effects particularly farmers. In
either the consequences Of the dissemination OF such popa-
ganda unfortunate since is calculated to muddy the waters
when clear thinking about business conditions especial
y desirable In reality these critics committing of the
most serious known logic which the confusion OF
and effect
Carter Glass Of Virginia. recognized of the
best authorities currency and banking in the country recently
took occasion to show that the Federal Reserve banks not
responsible for the calamites il such they resulting from
deaon "The truth in sentence said he is that falling
prices caused the deaon OF credits and currency such as
have witnessed since January Of last year. and deaon
credits that the Of the fall OF prices Speaking the
senate, Mr.. Glass quoted by the Dallas News, says
have here for year and heard denouncng the
Federal Reserve Board for withdrawing circulating notes has
particle of authority under the law to withdraw single
dollar OF currency from circulation.
ut may decline to issue currency upon request OF regional
establishment of system which has that may
levy Federal Reserve make their issuance
nvng to the regional banks but there is no instance of record
in which il has levied penny of tax note issues
The board has any time indicated bank that
should not engage in lawful and proper redscon activities and
has denied the application regional bank for dollar
of federal currency.
q pondy deny that there delation of either regional
bank credits dmnuon OF Federal Reserve
products"
quotations from month month that the deaon of the farm
began July 1920 and continued through January 1921
that both the total paper held by the Federal Reserve System and
the Of Federal Reserve notes in circulation increased dur
ing this time
"An analysis OF these statistics shows that the total amount
OF redcod paper held by the twelve regional banks
credits has been charged these banks of January 1921
had increased their accommodations member banks the aggre
gate of $2659OO an expansion OF $IzOSSOo in the twelve
on January 1920 the twelve regional reserve banks had
circulation the of $3O0S8O0 Instead OF
reducing circulation these banks January 1921 had
outstanding circulation aggregating $3,3362S1000 total
of of $2ooO for the twelvenonh period
of falling prices.
Indicating how the Reserve banks to the of the
farmer, Senator Glass said:
"The Federal banks of the north without compulson
any kind largely the assistance of the agricultural
of the south and west At time October 1920
the cropmoving period OF that year. when the prices of ag
cultural products going down. the Federal Reserve Bank
Cleveland alone was oang to the reserve banks in the west
and south no less than $145800000
MARK this The loans of the federal Reserve bank Ceve
land the south and exceeded its total loans member
banks Of its district including the banks Of the great cities
Of Pittsburgh Cleveland and Cincinnati the greatest industrial
district of the United States
from sockholding of
district they represented the vision the enterprise the activities
Of the and industries of that territory yet effort
distressing situation they loaned to the banks in the
Federal Reserve banks at Boston and Philadelphia and New York
by permission of the Federal Reserve Board loan from their
funds and southern Federal Reserve banks for the
lief OF the agricultural situation those sections Indeed the
Dallas Federal Reserve bank borrowed continuously from the
northern banks from the spring Of 1920 December Is
1921 Minneapolis just finished paying Of debt to these banks
last November and Richmond and Atlanta last December Hap
OF the FEDERAL Reserve banks above their
requirements each standing its with the ability
and the willingness to take Of all reasonable credit require
ments"
Admitting that discount rates raised during the period
when defaton proceeding tMr Glass pointed that in
spite Of this fact of credit continued and he further
took occasion point that the in the discount fol
lowed resolution passed by the May 1920 requesting
Federal Reserve steps
poses take recommend to member banks the
ing initiation Of currency and credits and consequent high prices
This resolution passed unanimously indicating belief in the
minds of the then that initiation had reached danger
point and that it must be checked stop the rising cost
of living The senator's who then having fits III
on telling that delation the of all
Under the circumstances senatorial wisdom be
cepted with grain of salt
Money talks but not much talk money-Piburgh
Press.