During the year 1921 legislation of various kinds was considered by Congress in the attempt to secure application of reserve funds on a freer basis to agricultural and other needs. The demands of farmers who had suffered severely from the tremendous fall in the price of their products unaccompanied by a similar fall in the value of manufactures during the latter part of 1920, and the early months of 1921, led to a Congressional investigation of the reserve system, carried on during the late summer of the year 1921. This investigation developed not only the general theories upon which Federal Reserve banks had been conducted, but also the facts with respect to the distribution of credit among different types of business. Most of these data had already been presented by the Board in its monthly and annual publications, as well as the publications of the several Federal Reserve banks, but the investigation at least afforded a new synthesis of them. The showing thus made did not, however, apparently relieve the criticism which had been directed against the system and the belief has undoubtedly gained ground in many minds that it is an organization which works primarily in the interests of the manufacturing or industrial classes and against the farming population. Careful scrutiny of the facts and figures relating to the system's operations affords little warrant for any such belief, but the fact remains that the peculiar banking character of the system and its lack of contact with the average man tend to make it unpopular and to furnish a ground for the growth of political prejudices which would not be afforded were the type of organization somewhat different. This state of things, of course, furnishes no reflection upon the scientific or financial merit of the system, but must be taken as indicating a reason why the organization has not fitted comfortably into the general business and economic structure of the nation.

The Federal Reserve System, in short, has proved its practicability and service to the community; has been indispensable in aiding in financing the war and post-war operations of the government; has performed, and is to-day performing, without cost both for the government and for the banks, functions in the transfer and care of money which are almost invaluable; has shown itself able to expand its credit-granting powers and to resist almost any ordinary strain to which it can be subjected; has been free from undue political influence, and has been, on the whole, reasonably efficient and careful in its use of funds. It has failed to come into contact with the rank and file of the public; to control rates of interest and discount as many had expected that it might; has done little to correct existing inequalities in the distribution of credit among individuals; has abstained entirely from participation in foreign trade financing or international operations except those of a stereotyped sort; and, in the opinion of large classes of the community, has been relatively indifferent to their needs or requirements. Its services are thus substantial and the criticisms directed against it, although in part well founded, are also in part imaginary or exaggerated. Nevertheless, the organization has still to make a definite place for itself in American banking although its service has been so conspicuous that the destruction, or even very far reaching modification of it, does not now seem immediately probable.