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Senator Robert L. Owen, Chairman of the Senate Banking and 

Currency Committee, testified at the Senate Silver Hearings in 1939 

that:

"In the early part of 1920, the farmers were exceedingly prosperous. 

They were paying off the 

 

 

 

mortgages and buying a lot of new land, at 

the instance of the Government--had borrowed money to do it--and 

then they were bankrupted by a sudden contraction of credit and 

currency which took place in 1920. What took place in 1920 was just 

the reverse of what should have been taking place. Instead of 

liquidating the excess of credits created by the war through a period 

of years, the Federal Reserve Board met in a meeting which was not 

disclosed to the public. They met on the 18th of May, 1920, and it was 

a secret meeting. They spent all day conferring; the minutes made sixty 

printed pages, and they appear in Senate Document 310 of February 

19, 1923. The Class A Directors, the Federal Reserve Advisory Council, 

were present, but the Class B Directors, who represented business, 

commerce, and agriculture, were not present. The Class C Directors,

representing the people of the United States, were not present and 

were not invited to be present.

Only the big bankers were there, and their work of that day resulted in 

a contraction of credit which had the effect the next year of reducing 

the national income fifteen billion dollars, throwing millions of people 

out of employment, and reducing the value of lands and ranches by 

twenty billion dollars."

Carter Glass, member of the Board in 1920 as Secretary of the Treasury, 

wrote in his autobiography, Adventure in Constructive Finance 

published in 1928; "Reporters were not present, of course, as they