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Show THE FEDERAL RE-I RE-I SERVEJANK i The following editorial Is taken from the Match 4th Issue or Wallaces I Farmer, published at Des Moines, Iown, under tho idltorial manage-nieiit manage-nieiit of Henry C. Wallace, the new secretary of agriculture In President Huntings cabinet: I "Where Is the proper function of the Fcdeml'ncservo'liank? Is it to bo simply a great reserve bank Institution, In-stitution, whoro the credit reserve, of tho country can bo mobilised and loaned as tho needs of business make necessary? Or besides being a banking bank-ing Institution for the mobilization of credits Is It to have the light, through the arbltrar) extension or contraction of these credits to raise or lower prices generally and In particular, par-ticular, and thus make good buslue?s or bad business, according as the members of the Federal Heseive boar,! In their wisdom may decide? "It Is highly Important that Us proper functions bo derlned. For this tederal board now seems to have In It the power to make nnd unmake business as It may choose. And further the power to make or break almost any of tho great Industries of the nation. "If the Federal Heserve Hank Is to bo n giea banking institution and nothing else, then It Is etlrely proper that It should be run by bankers, tho very best bankers in the entire conn-, try. - "IT. on the contrnry ll-Is to tixer-clro tixer-clro almost aoliite power over tho business of tho country, make nnd unmake II as it may think wise, send prices up aud down t H own sweet will, then it Is highly Important that the members of the reserve board "hould not be bankers alone, but capable cap-able men who understand the business busi-ness of the country and who are representative rep-resentative of the various great ln-duslries. ln-duslries. "We have had an Illustration during dur-ing the past six months of the power of the Federal Heserve board over the business of the country. It Is being be-ing held responsible for bringing 'about the drastic detlatlon. Perhaps It had not Intended to deflate prices to the extent they have been deflated Perhaps the thing gof away from them, no that as It may, they slatted slatt-ed It 'and the results aie mulous. "At the present lltile the Fedeial Heservo bank has exeess reserves amounting to a little over five hundred hun-dred million dollars, morn than at any lime in thu past eighteen months Last summer Its excess reserves were two hundred and fifty million dol- j lars. At that time It could bare ex- i panded the credit of the couutry at least five hundred million dollars without imperiling Its reserves. Now its icserves are sulllplent to noivo as the source for five billion dollais worth of extia credits. , "The Increase In the reserves of the Federal Heserve banks during the past three months Is delated to as reassuring. That all depends upon up-on how wo look at It. TheyTirdlentn that credit has been restricted; that liquidation lias been going on at a torrlfflc rate. They do not, however, howev-er, tell tho story of what this 1lqu-datlon 1lqu-datlon hns cost the people who have liquidated, nor what it has cost the farmer. "If the Fedel'al itesenv board is to bn allowed to continue to exorclre such n powerful Influence over the business of the country, then the ni nm hers of the board should noi be bankers alone but' representatives or tbo various Industries, the most Intelligent In-telligent ropreroatntivo.1 who can bo found In tho entire nntlon. TV re should be 'one or two farmers on the board, because farm prices are more . easily Influenced by the nctlon of Hip Federal Heserve than prlres of any- j thing else. There should bo u'repro- ( Heiitative of the manufacturing Interests, In-terests, j "We should have a showdown on this whole business right away. The theory on which the Federal Heserve Hoard has operated during tho past year places altogether too much power pow-er in lh hands of men who are not I thoroughly representative or the various var-ious Industries of the nation." |