The CHAIRMAN. Mr. Williams, may I ask you how long will it take you now to present the matters you have in mind? I want to give you every opportunity to present everything that you think would be of value to the commission.

Mr. WILLIAMS. Well, I think I could get through in a couple of hours.

The CHAIRMAN. If it would take a couple of hours, I think we had better take a recess until to-morrow morning. Without objection, the commission will stand in recess until 10 o'clock to-morrow morning.

(Whereupon, at 5.15 o'clock p. m., Tuesday, August 2, 1921, an adjournment was taken until 10 o'clock a. m. of the following day, Wednesday, August 3, 1921.)

AGRICULTURAL INQUIRY.

WEDNESDAY, AUGUST 3, 1921.

CONGRESS OF THE UNITED STATES,

JOINT COMMISSION OF AGRICULTURAL INQUIRY,

Washington, D. C. The joint commission met, pursuant to adjournment, on yesterday, at 10 o'clock a. m., in room 70, Capitol Building, Representative Sydney Anderson (chairman) presiding.

The CHAIRMAN. The commission will come to order.

Mr. Williams, you may proceed.

STATEMENT OF HON. JOHN SKELTON WILLIAMS, FORMER COMPTROLLER OF THE CURRENCY—Resumed.

Mr. WILLIAMS. Mr. Chairman and gentlemen, in looking over my papers yesterday afternoon after the close of the session, I found that there was one table to which I referred which I had not handed over to the official reporter. I shall do so now, with your permission, and read the same.

The CHAIRMAN. If there is no objection, you may proceed.

Mr. WILLIAMS. This is a brief table showing the total amounts of "agricultural paper" and "live-stock paper" held by all Federal reserve banks on the last Friday of each month for the last five months of the years 1921 and 1920.

The CHAIRMAN. Does that show an increase or decrease during those five months?

Mr. WILLIAMS. That shows an increase from May, 1920, to May, 1921, of I should say about 60 per cent; from $140,000,000 to $229,000,000. The percentage of increase is very handsome. The actual increase is not so impressive. These figures may go into the record, may they, Mr. Chairman?

The CHAIRMAN. Yes; without objection they may go in. (The table of figures referred to is as follows:)

Total amounts of agricultural and live-stock paper held by all Federal reserve banks on the last Friday of each month for the last 5 months of the years 1921 and 1920.

Mr. WILLIAMS. The figures in this table, Mr. Chairman, rather remind me of the percentages of increase which were shown a few years ago in certain parishes in the diocese of Virginia. The annual report of the bishop showed that certain small parishes were showing enormous increases, some 100 per cent and some 150 per cent and some 200 per cent, while the flourishing parishes in the large cities showed increases of only 5 or 10 per cent. Some one was struck by the comparison and investigated to get at the real facts, and he found the explanation. It appears that in some of those remote congregations there would be one year, perhaps, reported one communicant; the next year it would be two, and the percentage of increase was placed at 100 per cent, without the actual figures. In another case there would be two communicants, and it would be increased to three, and the increase would be 50 per cent. These increases of the advances to the agricultural districts remind me very much of those parishes.

It is true that the figures show an increase from $140,000,000 to $229,000,000 from May, 1920, to May, 1921, but how pitifully small those percentages are, compared to the total loans to the business interests of the country; and how small they are when compared to the total loans and discounts made by all the reserve banks.

The $229,000,000 amounts to hardly as much as this Government spent in the closing days of the war in five days. The total loans of the national and State banks of the country, I suppose, amount to $30,000,000,000 or $40,000,000,000. And when you consider the help extended through the reserve banks on agricultural and livestock paper, and compare this $230,000,000 with all the loans in all the banks, of $40,000,000,000, you realize that the farmers and livestock raisers are not drawing very heavily on the banks, or if they are drawing upon them their drafts are not being honored.

Representative FUNK. Can you give us that situation in the total amount rediscounted by the Federal reserve banks?

Mr. WILLIAMS. The figures which are available to me and which are drawn from the Federal Reserve Bulletin, and which I have just placed in the record, show a total of $229,000,000 of agricultural paper and live-stock paper having a maturity of over 90 days.

Representative FUNK. What was the total amount outstanding during that time of all kinds of paper ?

Mr. WILLIAMS. That is in the record already. I will have to look it up in order to give that to you.

Representative FUNK. I wanted to get it in here in order to get the contrast.

Mr. WILLIAMS. At yesterday's hearing I called attention to the fact that I think it was in November, 1920-the total loans and rediscounts and acceptances purchased by the 12 Federal reserv banks aggregated about $3,000,000,000; so that the agricultura paper and live-stock paper represented about 8 per cent, or scarcely 8 per cent, of the total accommodations granted by the Federa reserve banks, which is a very small percentage, if that is all, when w consider the value and invested capital in agriculture and live stock and the fact that it is claimed that 43 per cent of the population of the country are engaged in agriculture.

The CHAIRMAN. You gave the figures of $3,000,000,000 as repre senting the total discounts?

Mr. WILLIAMS. Loans, discounts, and acceptances, as I recall it. The CHAIRMAN. As of what date?

Mr. WILLIAMS. November, 1920. I think it was about the maximum at that time.

The CHAIRMAN. That total, however, has been very much reduced at the time of this compilation of $229,000,000.

Mr. WILLIAMS. I would like to put into the record another table, Mr. Chairman, There has been considerable contraction, but Í would like to put into the record another table, which answers that question.

The CHAIRMAN. Very well.

Mr. WILLIAMS. I have the statement here. I have taken this from the New York Times. It shows that on July 20, 1921, the gold reserve was $2,508,298,000, as compared with July 23, 1920, when it was $1,983,271,000, an increase in the gold reserve of $500,000,000 or $600,000,000 in a year. Bills discounted and bills bought, however, between July 23, 1920, and July 20, 1921, instead of showing an increase during this period of deflation and contraction show $1,710,056,000 on July 20, 1921, and $2,823,450,000 on July 23, 1920, a contraction of a a billion dollars, or more than a billion dollars; about $1,100,000,000. The Federal reserve notes outstanding on July 20, 1921, were $2,564,613,000, as against, on July 23, 1920, $3,118,205,000. The total resources on July 20, 1921, were $5,216,780,000 as against on July 23, 1920, of $6,075,124,000.

May I place this table in the record, Mr. Chairman ?

The CHAIRMAN. Yes; without objection it may go into the record. (The table referred to is as follows:)

Mr. WILLIAMS. I should call attention, however, to the fact that the amount of Federal reserve notes outstanding at any particular period is no criterion of the amount of money in circulation, for the Federal reserve notes are largely issued in exchange for gold acquired and placed in the vaults of the reserve banks.

The CHAIRMAN. I just wanted to get the figures, if I could, in connection with this $229,000,000 of agricultural paper which, I take it, was of some date in June.

Mr. WILLIAMS. That is shown on a table which is in the record. The CHAIRMAN. The figures for total loans and discounts, including acceptances for the same month; have you that figure?

Mr. WILLIAMS. It is on this paper, Mr. Chairman, to which I will call your attention, with your permission.

The CHAIRMAN. All I want to get is the June figure; the total loans and discounts for all Federal reserve banks in June.

Mr. WILLIAMS. In May, 1921, it was $229,000,000, and in May, 1920, it was $140,000,000, of agricultural and live-stock paper.

The CHAIRMAN. What I want is the total loans and discounts. Mr. WILLIAMs. That is in another table. I do not have that table

before me.

The CHAIRMAN. The figures that I have before me show the total loans or assets of the Federal reserve banks at the end of June, 1920, as $2,229,000,000.

Mr. WILLIAMS. I have not those figures at hand.

The CHAIRMAN. I just wanted to get that into the record so that we would have the comparison for the same month.

Mr. WILLIAMS. Yes; but I have not those figures, Mr. Chairman. Senator LENROOT. The charge is being made constantly that the agricultural communities are being discriminated against in the matter of accommodation for loans; what is the significance of these two tables which you have just read with reference to that charge? Mr. WILLIAMS. The significance of these tables is that they represent a painfully small proportion of the total loans and discounts; that the advances on agricultural and cattle paper represent a very small proportion and have for the last year or two represented a very small proportion of the credits granted by the Federal reserve banks to the business of the country.

Senator LENROOT. Oh, I understand that; but does it indicate that there was any deflation or contraction of that amount during that time?

Mr. WILLIAMS. Assuming that all paper over 90 days is classed as agricultural paper, it has increased during the year to the extent of probably $100,000,000, but the $100,000,000 increase represents a very small proportion of what the farmer had to have to maintain himself.

Senator LENROOT. The question goes back then to whether the farmer was receiving what he should have had prior to that time, rather than to any question of deflation as against the farmer?

Mr. WILLIAMS. So far as the paper is concerned which is discounted by the Federal reserve banks?

Senator LENROOT. Yes.

Mr. WILLIAMS. Now, it would require a further investigation to find out whether the farmers' credits have been deflated on the whole or not. It is conceivable that while the farmer may be getting, or may have been getting, $100,000,000 more-or, rather, while $100,000,000 more of farmers' paper was being rediscounted this spring than at a certain time last year by the Federal reserve banks for the farmers, yet it may be that the farmer may have been required to pay up his loans and actually may have gotten less than he did before, because the member banks necessarily loan to the farmer large sums of money which they do not obtain from the Federal reserve banks.

Now, as I say, we can only make surmise as to what those actual conditions were until we can get the facts from the parties interested. Let me illustrate: We will say a certain country bank was loaning $100,000 to farmers a year ago, and continued to hold that paper of the farmers; suppose that the country bank, owing to restrictions and red tape on the part of the Federal reserve bank, has been averse to using its farm paper for its rediscounts. The figures in that bank would show that the member bank, the country bank, has been