186

was  intended  to  ruin  the  American  farmers,  who,  during  this  period, 

were denied all credit.

117

At the Senate Hearings in 1923, Eugene Meyer, Jr. put his finger on a 

primary reason for the Federal Reserve Board’s action in raising the 

interest rate to 7% on agricultural and livestock paper:

"I believe," he said, "that a great deal of trouble would have been 

avoided if a larger number of   the eligible non-member banks had 

been members of the Federal Reserve System."

Meyer was correct in pointing this out. The purpose of the Board’s 

action was to break those state and joint land stock banks which had 

steadfastly refused to surrender their freedom to the banker’s 

dictatorship set up by the System. Kemmerer in the ABC of the Federal 

Reserve System had written in 1919 that:

"The tendency will be toward unification and simplicity which will be 

brought about by the state  institutions, in increasing numbers, 

becoming stockholders and depositors in the reserve banks."

However, the state banks had not responded.

The Senate Hearings of 1923 investigating the causes of the Agricultural 

Depression of 1920-21 had been demanded by the American people. 

The complete record of the secret meeting of the Federal Reserve 

Board on May 18, 1920 had been printed in the "Manufacturers’ 

Record" of Baltimore, Maryland, a magazine devoted to the interests 

of small Southern manufacturers.