GOVERNMENT: The Banker's Banker

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"You shall not press down upon the brow of labor this crown of thorns," thundered William Jennings Bryan at the end of the peroration that won him the Democratic presidential nomination in 1896. "You shall not crucify mankind upon a cross of gold." In the most famed speech ever made in the U.S. on money, silver-tongued Bryan pounded home a 24-carat political fantasy: the bigger the money supply, the more for everyone. Bryan's particular panacea, a switch from gold to silver as the basis for an expanded currency, was discredited after his defeat by Republican William McKinley. But the easy-v. tight-money controversy, bitterly disputed ever since the founding of the American Colonies, is far from dead. Last week it was livelier than ever. The question: Is money so scarce that it is pinching off the boom and threatening to plunge the U.S. into recession?

Not since the Depression has money been so tight or so costly. In the midst of industry's greatest expansion, businessmen are finding that interest rates for loans are more than half again as high (up to 6%) as they were two years ago. Home-buyers are hard pressed by a dearth of mortgage money; housing starts are down 17% from the 1955 level-For the first time since the '30s, bankers are reluctantly turning away borrowers—as many as three out of five in some areas.

Squarely in the center of the argument over the nation's money supply is 49-year-old William McChesney Martin Jr., $20,-500-a-year chairman of the Federal Reserve Board of Governors, known to bankers and other moneymen simply as the "Fed." It is Chairman Martin who, with his six-man board and twelve Federal Reserve Bank presidents, has the overall responsibility for regulating the nation's flow of money and credit, the lifeblood of an expanding modern economy.

Like a Schoolteacher. For the Fed's part in tightening credit, Martin has been bitterly assailed. Says Economist Arthur Smith, vice president of Dallas' First National Bank: "I think they're tightening the screws far too close. In some areas of the consumer-credit picture there are undoubtedly abuses. But the Fed is behaving like a schoolteacher who punishes the whole class because two to three children are bad." Says Trust Co. of Georgia Board Chairman John A. Sibley: "When money is scarce, it's the little man who suffers."

On the other hand, S. (for Seth) Clark Beise (rhymes with high C), president of the Bank of America, biggest U.S. bank (1955 installment loans: more than $1 billion), feels that there is "insufficient evidence that there are not enough funds to finance necessary capital outlay. There are enough long-term loans available and enough equity loans." Bill Martin himself summed up the controversy last week: "Thoughtful people, who take the long view, approve. People who are pinched naturally say it will only bring on a depression."