The Nonpartisan Leader Newspaper, August 22, 1921, Page 7

* & .. bosses of the Republican-party three trust companies in an effort to negotiate a loan on some railroad stocks. The client had been turned down at -each trust company. No question of the value of his securities was raised, but he could not borrow a dollar on them. I asked Mr. Barker: “What does this all mean?” Said he: ' “The federal reserve board has begun to deflate the currency. We are in for another period .of deflation .and destruction similar to that which .succeeded the Civil war, and the retirement of:the greenbacks.” Continuing' Mr. Barker said: “I have this day-ad- dressed a letter to the federal reserve board pro- testing against their policy of deflation. Inflation is bad, but deflation is worse, because 'deflation means commercial suicide. “Our per capita currency is far below ‘that of the other nations which participated in the war. . The present outstanding currency is not in excess of .our needs. Its deflation is not justified. I-do not favor No less a:person than John Skelton Williams, until recently comptroller of the currency and ex- -officio:member of.the reserve board, is.one of the authorities quoted by Mr. Lord in his second ‘article -on deflation, printed on these pages, to show how the federal reserve bank system delib- erately brought on the present agricultural and business depression. policy of the financial kings, to protect themselves while they wrecked the country, is explained by Mr. Lord in this article. The farmer was their first victim. Do not miss this enlight- ‘ening article. ~Read every word of it. inflation, but I am absolutely opposed to deflation. Deflation will ruin the debtor class. If the reserve board proceeds with the policy of deflation, bank- ruptcies, business failures and widespread suffering are inevitable.” In substantiation of Mr. Barker’s views, I quote here a recent utterance of one of England’s fore- most economists, who in speaking of the sudden slump which has overtaken the business world, -says: “What then are the common denominators which best account for the disaster now impending? I have pointed out one, i. e., the deflation of credits and currencies. It is enough to say that if this in- tentional and malevolent destruction of credit is fol- lowed to its logical conclusion, men’s hearts may well fail them everywhere for the days that are at hand.” ) We turn to another chapter of federal reserve bank policies. While spreading calamity and dis- What are you going to do about it? The cruel, conscienceless aster like a pestilence over the country by deflation, the federal reserve bank officials are not permitting themselves to suffer. They have provided for them- selves handsomely in the matter of salaries and personal comforts. I quote again from Mr. Williams: “While the federal reserve board has been preach- ing deflation with such vengeance, it is interesting to note that there has been no deflation in the sala- ries paid to the officers of the 12 federal reserve banks, especially the big banks. For example, in 1916, the salaries paid all officers of one reserve bank aggregated $93,000, while the amount paid for officers’ salaries for the same bank in 1920 was over $400,000. The total payroll of the federal re- serve bank of New York in the period of acute de- flation increased $778,000 in that one year. “These high-salaried officials, men not particu- larly conspicuous either for talent or comstructive (Continued on page 15) {" Farmers Put to Bed With Railroads President Harding’s Plan to Get Money for Transportation Barons by Connecting Their Plea for Cash With Legitimate Demands of Agriculture Washington Bureau, Nonpartisan Leader. HE Norris bill ‘for adequate financing of ‘farmers and handling the surplus crops this year is dead. The Harding administration killed it when it -rec- ommended that, instead, a make-shift farmer financing plan in connection with the * of linking the. proposition to relieve farmers with the proposition to hand out a half billion to rail- roads. They knew . that the new railroad grant would have hard sledding in-both houses if it had to stand on its own feet, but they believed that if it could be joined to.a denatured proposition to re- - lieve farmers it would pass, as the farmer represen- financing :of the railroads be P2 W provided for through the re- /// / // vived War Finance corpora- THEY'LL TAKE CARE. OF MY HALF BILLION L, FIRST .AND THEN - YOU'LL GET tion. In other words, the ad- ministration made an attempt to put the farmers to bed with the railroads —to couple the legitimate demands of agricul- _ture -with another railroad grab of '$600,000,000. The Norris bill provided for the organization of a new gov- ernment . corporation, with -an appropriation of $100,000,000 »and authority. to issue a_billion .dollars in bonds guaranteed by ‘ the government. 'This new cor- .poration was ‘to buy the sur- plus agricultural products this - year and sell:them to: Europe. ‘There is no:-doubt but that the Norris bill would have gone a long way to relieve the disastrous conditions ' prevail- _ing relative to American agri- culture. The senate “farmer bloc” was solidly behind the bill and it looked as though it swould easily, pass. \ WHATEVER'S LEFT! = ‘But President Harding step- vped in -and -effectively killed “the bill. The administration is ~against * “putting ‘: the govern- ment in: business,” as they de- -clared the Norris bill did. Also, :President Harding and the were looking for a way to car- _*ry out promises to the -rail- roads by cutting another melon . for. them. IThey wanted to-get ~$500,000,000 of government _-credit' for-railroads. So they .~conceived . the .ingeniaus ..plan T ST S L BT i 3R o e AL IS4 44 s “President Harding, as explained in- the. accompanying report from :the ' Leader Washington bureau,-has attempted:to-get :government financial aid for the. railroads by coupling the rail- .road demand for: money: with financial rglief for the farmers, proposing: to have both.taken care of-in the: same"bill. ‘ Unless-some such scheme: could :be; put. through,” connecting’ farmer ~relief-with aid for the roads, already gorgéd-with excessive: rates, it is‘doubtful if the-admin- istration could:have.its; friends, the owners of watered railroad -stock, taken care -of. . Baer“hag' 1abeled: this:drawing of ‘the situation “Strange’ Bedféllows.” ‘PAGE SEVEN 3 BY PUTTING THEM TOGETHER , I MAY (& BE ABLE TO GET'[Z AID FOR THE. RalLRoaDS! tatives, to get aid for their constituents, would have to vote for the railrga/d grab. So the president recommended that : both the farmers and railroads be taken care of by the re- -vived War Finance corporation, but that the War * Finance corporation provide for the farmers in an entirely different way than the Norris bill provided. The administration proposed, instead of the government cor- / poration buying and pooling the surplus crops for export and selling them to foreign buyers, that the War Finance corporation simply provide for loaning money to banks which in turn-will loan it on farmer paper. Thus the banks would get their rakeoff and the exist- ing exporting machinery, with its profits and commissions, would not be-disturbed. Senator Norris denounced the Harding plan as a betrayal of the farmers. Farmer rep- resentatives also - denounced .the plan to couple legitimate ‘relief for agriculture with the railroad 'grab. Senator XKel- logg of “Minnesota introduced the bill to carry out the admin- istration plan. In the midst of the fight Senator Norris suffered a breakdown in health from overwork. The -agricul- tural “bloc” saw_the hopeless- ‘ness of trying to put over the original plan‘in the face of the flat opposition of the Harding administration. The “bloc” ‘therefore tried to get a com- promise, - which would modify some of the features.of the Harding plan : and “retain as much of the .original Norris plan as could-be passed. in-the face of the administration op- position, sin this, and the senate has rpassed practically the admin- ristration bill. The original ‘Norris bill isidead. “The farm- -ers have’ President: Harding to - rthank for this-fésult, _ -— a But they failed even - X