AGRICULTURAL RELIEF 
525 
Commission had even less power, as I think, when it was originally 
conceived and established than this board, even if it were granted 
only very modest ones. It was through the study and the experience 
and the application of the powers gradually granted to the commis- 
sion that we finally reached the point of the present efficient regulation 
of rates and the present efficient flow of the commodities of commerce 
through the channels of transportation. 
It has been suggested I think by Governor Lowden that what 
agriculture needs is something corresponding to the Federal reserve 
system. I think that illustration is meritorious and, to an extent, 
applicable. But we must remember in this connection that the 
function of the Federal reserve system is to regulate the volume and 
Aow of credit. Of course, that regulation has as an incidental effect 
in the stabilization of prices. But the Federal reserve system would 
not last long if its policies were predicated upon attempts to regulate 
the price level of commodities. There are many people who believe 
that in 1920 the Federal reserve system undertook the deflation of 
prices, and particularly of agricultural prices. I do not so believe; 
and I have some knowledge of what did happen. But if they did 
attempt to deflate prices it was a devastating and disastrous 
pXperiment. 
Mr. FvumeEr. May I interrupt you one moment? 
Mr. ANDERSON. Just a moment—and I should hate to see any- 
thing done in the attempt to regulate agricultural prices which might 
possibly result in an equally devastating and disastrous experience. 
Mr. FurLmer. You do not believe, then, Mr. Anderson, that the 
increase in the rediscount rate had anything to do with the decline 
in the bond market some days ago? 
Mr. AxpErsoN. I would not say that at all. What I said was, 
the principle upon which the board functions, the basis upon which 
it functions is the regulation of the volume and velocity of credit to 
meet the needs of business, that that had an incidental effect naturally 
apon the price level, and I was going to proceed from that to an 
analogy in connection with the marketing of agricultural products. 
Mr. Jones. Do you prefer to finish your statement before being 
questioned? 
Mr. AxpersoN. I would like to, although it does not bother me 
at all. I would like to make this part of it connectedly, and turn 
back to that in a moment. 
I want to make this analogy—and it is very difficult to make, 
because we are dealing with very close distinctions here, and it is 
difficult, in the first place, to express these fine distinctions or close 
distinctions in language which everybody will understand the same 
way. What I am getting at is there is a vast difference between 
attempting to regulate the volume and flow of a commodity through 
the channels of commerce, so as to obtain a degree of stabilization in 
the price during the year and over a period of years and attempting to 
artificially and directly stimulate those prices through market 
manipulations; in other words, it makes all the difference in the world 
in considering what we are doing here, whether what you are seeking 
to do is to bring about an orderly and continuous flow of these com- 
modities into the channels of commerce and thus stabilize the price 
during the crop year and over a period of years, or whether what we 
are trying to do is artificially to stimulate and maintain a price or