The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1923-01-12

Minnesota, farm bloc" leader, was
chairman, found that such was not the
case, and it reported that credit was
not absorbed during the period OF in
flation' early in 1921, by the financial
centers for speculative purposes at the
expense OF the rural communities
Students OF the economic situation are
agreed that there has been pretty fair
work done by the bankers. who have
distributed credits with consistent fair
ness to industrial and agricultural sec
tons. But this is not enough. since
the depression in agriculture is not
being cured by the present financial
pallatives.
Eugene Meyer. Jr.. managing direc-
tor of the War Finance Corporation,
has issued statement vigorously
criticising some of the member-banks
of the Federal Reserve system, who
he says are carrying in their state
ments or in their advertisements the
announcement that they do not bor-
row from the Federal Reserve Bank
or that they have no loans or redis-
counts" in these institutions. He ques-
tons whether such banks are serving
the best interests of the people of
their territories" He says this is es-
pecially true in the agricultural ter
ritories. Meyer was at the head of the
War Finance Corporation when its
function was to arrange war hnanc-
ing. The Federal institution was res
directed and put in motion in order TO
supply emergency credit to the agri-
cultural regions. Millions of dollars
have been made available for the
farmers. The plan is operated in con-
nection with the Federal Reserve sys-
TEN. and elastic money" for the bene-
fit OF farmers has been obtained by
working various known and unknown
schemes of borrowing. When the
banks themselves began to shut down
on obtaining new money to loan their
customers, from the Federal Reserve
Banks OF the districts in which they
were located. then in consequence fol-
lowed curtailment of credit to farm
ers. This came on top of suspected
movement on the part OF some of the
great private banking interests
throughout the country. Director
Meyer therefore, donned the war-f-
and sailed into the Offend
ing Federal Reserve banks iiectly,
but by addressing his protest to the
attention of the American Bankers
he killed two birds with
a single shot The private bankers
are skilled enough to dissect in Mey-
er's statement the reproaoh that .hey
were regarded as largely responsible
for the increasing inelasticity' i'll the
motions of elastic money
The Science of Credits
The Federal Reserve Banking sys-
.em is only nine years old. When it
as instituted there were thousands
If bankers throughout the country
Who Joined the croakers in predicting
hat 1T won't work" But it was not
ong before they covered themselves
nder its benign protection and when
yer they got into a pinch they bor-
owed money from the Federal sys-
EN-. and thereby not only succeeded
4 providing more elastic credits for
heir patrons and community. but add
d to their hours OF sleep and the les
ching of headaches that were COM c
ION to most bankers in the good old
avs before Uncle Sam furnished an '
dotes for bank-runs and panics. :
The Federal banking law was work n
out at the latter end OF the Civil II
Var. Under its provisions the ma
onal banknote currency was based
pom government bonds deposited in h
,e United States treasury, and the :
irrency thus issued was classed by d
economists as bond-secured currency. d
ndcr the more recent Federal Re- <
rive system every national bank is o
quircd to become stakeholder in "
e Federal Reserve bank OF the dis II
let in which it is situated, and state i
INKS and trust companies may also "
,come members. Each member s
INK is required to subscribe to the p'
ock OF the Federal Reserve bank to Il
c amount of six percentum OF its "
Iid-up capital stock and surplus. Y
hus the Federal Reserve bank 10 al
INKS. 1t is a depository OF its men, h
RS and for government funds. 1t II
,thing more nor less than bank OF OF
i'll be seen that the resources at its CT
mmand are practically unlimited. AZ
ne Federal district bank working in =