The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-10-11

giving publicity. In an address which
Governor Wellborn made before the
Alabama Bankers association at Mo-
bile several months ago he also made
assertions which were directly con-
trary to official records. and when he
was called to account for his err
roneous statements by Hon. John
SHELTON Williams, former comptroller
of the currency and member of the
federal reserve board. he wrote let
ter to Mr.. Williams on Juno 1, 1922,
confessing that the statements for
which he had been called to account
by Mr.. williams were incorrect.
hand you with this for your informa-
ton, extract from the Congressional
Record of July 81, 1922, containing
full correspondence between Mr.. Will
Ject.
Governor Weilborn, however, failed
to profit by that experience. In his
letter which you quote he says:
"In the later summer and autumn
of 1920, when the price of cotton
was falling rapidly, and fears for the
future were expressed by those who
directly represented the farming in
terest, we issued, in order to allay the
prevalent anxiety, statements from
time to time to the effect that we
would extend ample credit accommo-
dations and take care of our banks in
furnishing funds to our customers for
the purpose of preventing the dump
ing of cotton on a weak and falling
market"
l will now submit figures taken
from the federal reserve bulletins,
published by the federal reserve
board itself, which will. think, show
you whether or not Mr.. Wellborn
fulfilled his promise that the Federal
Reserve bank of Atlanta would ex-
tend ample credit accommodations
and take care of our banks in fur
nishing funds to our customers for
the purpose of preventing the dump
ing of cotton on weak and falling
market"
Total Outstanding Loans
The total amount of outstanding
loans and discounts and bought
paper" held by the Federal Reserve
bank of Atlanta at the beginning of
January, 1920, aggregated s104.950,-
900. And at that time the reserve
banks were urging farmers to In
crease production; plant more cotton,
more corn, produce more of every
thing. Farmers went ahead on the
assumption that their financial
needs would be provided. Between
y.
1920, the goose was hanging high in
the agricultural districts and big
crops were planted. and the liabilities
OF farmers were increased for the
purchase of fertilizer and farming
implements and in payments for la
Dor. The prices of agricultural COM
modities were generally being MAIN
tanned or advanced. Corn at Chicago
advanced from an average Of s1.47 In
January. 1920. to an average of s1.98
in May, 1920. Wheat at Chicago ad-
vanced from s2.ss in January to
s2.97 in May. Cotton remained
steady around 40 cents a pound. The
price Of hogs kept up around SIS.
On May Is. 1920, the total loans
discounts and bought paper held by
the Atlanta reserve bank amounted
to s13o.7o2. 900. having increased $685.
$4,000 coincidentally with the ad-
vance in prices. But about the end
of May or the LIST of June. 1920, the
prices of agricultural products be-
gan to tumble. and the reserve banks
began to increase their pressure. CIV
ing impetus to the downward move
ment.
On June IS. 1920. the total loans,
discounts and bought paper held by
the Federal Reserve bank of Atlanta
had declined to s126,e39,o 900.
In July. 1920. corn at Chicago aver
aged only s1.53 against $1.98 in May.
Cotton was weakening and wheat had
declined from an average of $2.97 in
May to $3.50 in July.
During the four months from the
end of June. 1920, to tho end of Oc-
tober, 1920, the Federal Reserve bank
Of Atlanta. during crop moving time,
when crops valued at billions of dol
lars had to be moved, increased its
loans, discounts and bought paper to
the extent Of only $53,000.0 900. or from
$126,63s.o00 on June 25, 1920. to