Morgan County Democrat. (McConnelsville, Ohio) 1886-1943, 1931-11-26

account. Do not get the impression
that l advise that the Government
scatter, waste, dissipate or engage
in season of extravaganza to place
this money in circulation.
HOW WILL THIS AFFECT AND
STRENGTHEN OUR BANKS?
All Banks must be on the basis
of our National Banks, and al;
banks must belong to the Federal
Reserve Bank System The Federal
Reserve Bank must be improved
and removed from all influence of
Special Interests and Political
Greed. The Federal Bank Reserve
must never again be used as base
for Stock Market Gambling. The
Federal Reserve Bank will loan
only to member banks, not to indi-
viduals, corporations or partner
ships. AS a gauge for safety and
for the purpose of stabilizing the
price of real estate, all loans made
to member banks must be secured
by REAL ESTATE. After all pos
sible safe guards are legislated for
the operation of THE FEDERAL
RESERVE BANKING SYSTEM,
this bank has an open drawing ac-
count on the Bond Currency Ac-
count" through the U. S. Treas
ury. Money from this Bond Cur
rency Account will be loaned to the
Federal Reserve Bank, without in
terest, the amount of these loans
will be credited to the Bond Cur
rency Account and debited to the
Federal Reserve Bank
The Federal Reserve Bank will
loan this money to member banks
on re discount basis at go inter
est, but will loan only 500 of the
original loan. To make this clear
to the layman, l will further ex-
plain: If the First National Bank
of Keokuk, Iowa, loans to John
Doe, farmer, 100000 on real
estate appraised at 100000 or
more, at $50 interest, then this
bank can send this secured note to
the Federal Reserve Bank and Sc
cure a loan of $1,000.00 for which
it pays 29o interest; the bank at
Keokuk can again loan this $1,000
90 to merchant or other resident
of Keokuk, send note to Reserve
Bank and receive another loan of
$4,000, etc. Under this plan you
will have no money panics, and real
estate values will be more uniform
To do business we must have
credit. To open new enterprise or
enlarge business we must borrow
money. If a farmer desires to buy
an adjoining farm, or wishes to in
crease his f1ocks or herd he should
be able to borrow money, of course
/ mean in proportion to his wealth
or ability to pay. Now under our
existing money system this places
the borrower in a very dangerous
| situation. How? We have learned
that If there is a money shortage,
panic, we cannot borrow money
from the local bank and when our
note comes due we must pay that
note. and to pay that Indebtedness
at that particular time means great
sacrifice, we have therefore become
very timid in making investments
in land, trade or enterprise that
places us at the mercy of the MON
Ely SHARKS and for this reason
we do not have the. local enterprise
we had in the past generation.
Now suppose under my plan your
l.
disposal unlimited capital (Through
the Federal Reserve SYSTEM to be
loaned on good security, is it not
reasonable that your local bank
will be willing and anxious to al
ways renew your note when due as
long as your security is good? If
the local bank loans to you at go
and can borrow from the Reserve
Bank at 2% is it not reasonable to
suppose that they will carry your
loan as long as you can pay the in
terest and retain the value of your
security? One of the greatest men.
aces to our western states, southern
states and rural sections is the
changed attitude of our country
banks during the past ten years.
knowing the weakness of our mon
ey system, banks have been obliged
to maintain liquid resources, and
have tried to steer clear of what we
term Frozen Assets" and instead
of loaning our local money to local
people, our banks invest this mon
ey in stocks and bonds of distant
enterprises to the detriment of the
home community. Unfair taxation
on real estate has made real estate
poor security The wealthy
class choose untaXable bonds for
an investment in preference to real
estate on which they must pay
heavy tax. Tax free bonds are a
curse to this nation and are the
cause Of the depreciation in real es-
tate.
When the people and our legis.
lators realize the fact, that huge
industrial plants, large corpora ions
centralized and monopolizing man
ufacture and trade is harmful to
both labor and the nation, they will
revive the idea manifested in the
Sherman Antitrust law, split up
all dangerously monopolistic enter
prises, and will encourage small
manufacturing plants to be scatter
ed throughout the nation, thus Civ
ing employment and taking the
employment to labor instead of tax
ing labor to the employment and
later leaving it stranded in some
big city; when this can be accom-
plished and real estate is returned