The Commoner
MACHv 1921
it
The Federal Reserve
Bank
The following editorial Ib taken from the .:
March 4th issue of "Wallace's Farmer', published
hit Des Moines, Iowa, under the editorial man-
agement of Henry C. Wallace, the new secretary
of agriculture in President Harding's cabinet:
"What is the proper function of the Federal
Reserve Bank? Is it to be simply a great re
serve bank institution, where the credit reserve
vol the country can be mobilized and loaned as
the needs of bus ness make necessary? Or be
sides being a banking institution for the mo-
ibilization of credits is it to have the right,
through the arbitrary extension or contraction
'of these credits,, to raise or lowir- prices general
ly and in particular, and thus make good
I business or bad business according as the mem
bers of the Federal Reserve Board in their
wiBdom may decide? . ' -"
"It is highly Important that its proper func
tions be defined. For tills Federal Board now
taeems to have in it the- -power to make and
mmake business as it may choose. And further
the power to make or break almost any of the
great industries of the nation.
"If the Federal Reserve Bank is to be a great
"banking institution, and nothing else, then it is
e entirely proper that it should be run by bankers,
the very best bankers in the entire country.
'If, on the contrary, it is to exercise almost
absolute power over the business of the country,
make and unmake it as it may think wise, tend
prices up and down at its own sweet will, then
it is highly important that the members of the
.Reserve Board should be not bankers .alone, but
icapable men whojinderstand the business of the -country
and who are representative of the vari-
ibus great industries.
"We have had an illustration during the past
mix months, of the power of the Federal Reserve
RBoard over the business of the country. It is
meing hejd responsible for bringing about the
Irastic deflation. Perhaps It had not intended
deflate prices to the extent they have been
ifiated. Perhaps the thing got away from
them. Be that as it may, they started it and
Rthe results are serious.
"At the present time the Federal Reserve
iBank has excess reserves amounting to a little
tover live hundred million dollars, more tnan
tat any time in the past eighteen months. Last
Hummer its excess reserves were two hundred
Bind fifty million dollars, At that time It could
lave expanded the credit of the country at least
Ive hundred million dollars without imperiling
Its reserves. Now its reserves are sufficient to
feerve as the source for five billion dollars worth
Ibf extra credits.
"The increase In the reserves of the Federal
jReserve Bank during the past three months is
pointed to as reassuring. That all depends upon
Sliow we look at it. They indicate that credit
has been restricted; that liquidation has been
i going on at a terrific rate, They do not, how-
sever, tell the story of what this liquidation has
rcost the people who have liquidated, nor what
it has cost the farmer.
"If the Federal Reserve Board is to be allowed
' to continue to exorcise such a powerful influence
over the business of the country, then the mem
bers of the board should not be bankers alone
but representatives of the various industries,
the most intelligent representatives who can be
found in the entire nation. There should be
one or two farmers on the board, because farm
prices are more easily influenced by the yaction
of the Federal Reserve than prices of anything
else. There should be a representative of the
manufacturing interests.
"Wer should have a showdown on this whole
business right away. The theory On which the
Federal Reserve Board has operated during the
past yefir places altogether too much power in
the hands of men who are not thoroughly repre
sentative of the various industries of the nation."
"COME ACROSS"
i
Yit WANT
BlfiC&ST
I
TOP NAVf
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New York World.
young man at his home In Washington Court
house, Ohio, and as member of the town coun
cil he championed a dry. ordinance, and that,
too, at a time when such leadership was rare.
Through all the intervening years and through
all the many hot contests leading up to. national
prohibition Mr. Daugherty unhesitatingly
espoused the dry side of the question.
In 1918, the year Ohio adopted the state pro
Hibition amendment, Mr. Daugherty was chair
man pf the committee on resolutions in the Re--publlcan
state convention. Wets anddrys lined
up for the decisive battle In November. The
war-time prohibition law had just been enacted
by Congress and the federal constitutional
amendment had been submitted but not ratified
by the necessary number of states. The report
of the resolutions committee was submitted by
Mr. Daugherty and contained this" plank:
"We favor supportTof the Prohibition Amend
ment to the state constitution and the enactment
of necessary legislation to make it effective. Ad
vocating and supporting Federal Prohibition
legislation as a war-time measure, we neverthe
less realize that sUch legislation automatically
repeals itself at the close of the war. Therefore
we favor ratification of the Prohibition Amend
ment to the Federal Constitution as a perma
nent solution of the liquor question."
The drys of the country will be pleased to
have a friend of prohibition in the office of At
torney General rather than a person who
through prejudice might interpret the laws to
the injury of the cause. American Issue.
CHAMP CLARK
ATTORNEY-GENERAL DAUGHERTY
Regardless of the political complexion of the
new national administration the drys of the
country are pleased with the selection of Harry
M. Daugherty of Ohio for Attorney General in
the Harding cabinet. His appointment assures a
'' friend of prohibition at the head of the legal
department of the government and at a time
When such a friend is needed.
Through the years Mr. Daugherty has:- con
sistently advocated the dry cause. .When a
praisement of his own powers ho declined tho
proffer of an appointment to tho Senate. He re
majnod where ho felt lilmsolf best qualified to
servo tho stato.
That ho served tho stato well there Is attested
by his repeated ro-olections, and by tho friend
ships ho established among his associates. And
no greater regret Is felt at his passing than by
those who encountered him in tho conflicts of
tho chamber, and had opportunity to appreciate
the temper of his steel and the strongth of his
arm. Washington Star.
Cha'mp Clark is best, and Tery accurately, de
scribed in the term, "a rugged American." He
had forpe and fight In him was sturdy and in
corruptible. He was distinctly a man of the
people understood them, and all his life re
mained close to them. He possessed the strong
qualities purpose and conviction, and both
moral and physical courage.
A warm and dependable partisan, and a party
asset of great value in time of controversy, he
yet was broad and fair in all matters not
freighted with party duty. He had won his way
to the chair in the House by aggressiveness on
tho- floor, but while in the chair he held the
scales as strictly true as a judge on the bench.
Both sides of the chamber accepted his decisions,
the Republicans questioning them as little as tho
Democrats.
Mr. Clark was an orator of power. He early
acquired the House manner. He had brought
the stump manner with him, and he amalga
mated the two very successfully. An educated
man, of wide reading, he was a master of
colloquialisms, and employed them in. his ad
dresses with taste and effect.
His speeches in the Houso had a wide vdrcula
tion, and gave him wide reputation. An excellent
specimen is the one delivered in opposition to tho
repeal of the law granting to American coastwise
vessels freepassago through the Panama canal.
The question will be presented to the new Con
gress, and upon the grounds taken' by Mr. Clark
in his admired deliverance.
He was a HouseKman. Ho liked the Houso
atmosphere, and shone Jxl it. With true ap-
LET'S SHARE WAR SPOILS EQUALLY,
SAYS COLBtf
A Washington, D. C, dispatch carried by the
Associated Press, under date of February 22,
snys: Equal opportunities for tho citizens of all
tho allied and associated powers, whether mem
bers of tho loaguo of nations t)r not, in former
enemy territories to bo administered by the
allied governments undor mandates, is insisted
upon in a note dispatched by the state depart
ment to tho council of the league, now in session
at Paris.
Tho noto wont forward last night to Am
bassador Wallace, who is to present it to the
council tomorrow. Its text was withhold, but
stato department officials described It today as
being virtually identical .with tho one on tho
same subject sent to tho British government last
November by Secretary Colby.
That note was couched In exceedingly firm
language. In it Mr. Colby took issue with the
British position that mandate agreements and
treaties wore to bo considered only by states,
members of tho loaguo, and declared that the
United States as contributor to tho common vic
tory in tho world war could not consider "any
of the associated powers, the smallest not, less
than itself, debarred from participation
in tho rights and privileges secured undor the
mandates provided in tho treaties of peace."
Initiation of this, tho flrst action to bo taken
by the United States to the council of the loaguo
of nations,, was at the suggestion of one of tho
allied powers, understood to have been Great
Britain.s
The British foreign office never" has replied
to Mr. Colby's noto in which he asked that tho
United States he permitted to examine the
draft . mandates before their submission to tho
league council for approval.
Meantime, however, Great Britain has sent
the draft mandates for Mesopotamia and Pale-,
tine to the council and it is understood that it
was for this reason that it suggested that the
United States presentits views to the council.
Action by the council on the mandates at the
present session had been expected and it was
explained that it was on this account that the
present administration decided to present its
arguments direct tp the council despite the fact
that only a little more than two weeks remain
before the new administration will como into
power.
Dispatches from Paris today said that inde
pendent of the action of the American govern
ment, consideration of the mandates goyerning
Mesopotamia, Palestine, and Syria had been
postponed until the April meeting of the coun
cil so that Winton Churchill, tho recently ap
pointed British secretary for tho colonies, .could
have an opportunity, to study the questions In
volved. The principal point at Issue between tho
United States and Great Britain is tho so-called
San Remo agreement between Great Britain and
France for the development of oil resources in
the mandate territories In the near east.
MRS. BRYAN GIVES PORTRAIT
The gift of a framed portrait of Mrs. W, J.
Bryanjhas beon accepted by the library board,
to bo hung in the city library. The offer came
through a letter from Mrs. Bryan to Mrs. A. S.
Raymond and was acted upon at tho last meeting
of the board. The portrait is in storage in the
city and the presentation has not yet taken place.
As Mrs. Bryan had several portraits taken while
in Lincoln, It's not known which of the paint
ings is to become the property of Lincoln. It is
supposed to bo half or three-quarter length, life
size. c
The library in considered a fitting place for
the permanent bestowal of the gift, as it was
through Mrs. Bryan's initiative that the present
library building was secured. She wrote per
sonally to Andrew Carnegie to ask for funds for
the building and has always retained keen inter
est in the whole library plan. Nebraska Stato
Journal, Lincoln, -Feb. 23, 1921. '
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