Evening star., 1920-12-06
RESERVE OFFICIALS
ARE ENCOURAGED.
Find Cause for Satisfaction
That Dehation Has Been
Smoothly Accomplished.
BY 1. A. FLEMING.

-
this fas lend of depression over busi-
ness conditions. in the announcement
by the federal reserve board tnat I'VE
are passing safely and with unprece-
dented smoothness through the period
of economic adjustment from war TO
peace time basis
The reserve board is in position
to know It's hands are on the pulse
of business and credit, and when 1t
makes the statement that the trans
ition through which We are passing, :,
while necessarily uncomfortable. mas
thus far been accomplished by the
minimum of unfavorable symptoms, it
plainly indicates that much of the
pessimism of today is not warra ntrd.
The board also calls attention to the
economic rehabilitation of European
countries, increasing their productive
power. and, therefore. purchasing
power.
The Edge Law" Bank gives sup
port to this statement. with this:
There has been invisible liquidation
in many forms. 1t is very good sign
that the dollar has advanced very
slightly the last month in exchange
with the countries of western Europe.
although it is well known that the
strain of settlement is very heavy be-
cause Europe must combine the pay
ment of bills carried for several
months. on the old usual terms OF
credit with cash payment on much
that was currently bought.
Bankers Back Foreign Trade.
Bankers claim that they are giving
encouragement to old exporters and
corporations and firms who UNDER
stand the business and have a right to
expect generous treatment. If the
exporters record is clean and his
standing solid there is no trouble in
arranging credits.
Much of the plant against bankers
in their dealings with exports is said
to come from inexperienced firms and
corporations lacking in capital and
looking to the banks to furnish too
large a share Of the cash for the ven
tures
New York Bank Statements.
Moler. a New York broker, thus
ddgests the New York bank state
The New York Federal Reserve
Bank statement makes such a sur
prisingly unfavorable showing that
it will doubtless have the effect of
sttnenfng up the call money market
this week, and thereby prevent the
development of anything better than
moderate fresh upturns in special
stocks in the general market.
The actual clearing houses state
ments change from deficit of ST.
deposits to liabilities to surplus at
present of $21.9S1. 900. which is almost
entirely due to the local banks in
creasing their reserves at the fed
efal reserve bank $2O,z10,0o0 on the
week. mainly by reAlscounts, although
their own loans were decreased $685.
140,000. The Treasury Department
drew down $3a,15&,000 of its deposits
with the banks during the week, and
now has only $2.2ss,oeo of such funds
left here.
The New York federal reserve banks
present ratio Of reserve to combined
liabilities is down to 37.S per cent,
against 40.S last week and 42.3 q year
ago while it's ratio Of reserve, after
fdeducting 40 per cent for, gold re-
serve notes, has dropped to only 35
per cent, the minimum limit, against
41.9 last week.
The loss of $4,000. 600 in gold and
an increase Of So, ,0o0. 900 in CONNER
cial paper mainly for federalreserve
banks were the causes for these de-
clines in its ratio Of reserve. Both
will have to be raised somehow dur
ing this week. Fortunately, however,
the regional federal reserve hank
statement makes a better showing
with its ratio holding at Al per
year ago. ,....- -
Bidding fer Deposits.
One hundred banks in the city Of
Chicago made bids for interest on
city deposits. City oficial& expect ed
4 per cent, but they were Ndfsapnoint-
ed. as the downtown banks offered
but per cent. and banks in outlying
districts made bids at az per cent.
DR.. R. A. Pyles, formerly president
Of the Anacostia Bank, later vice
president and director Of the same
institution. died yesterday afternoon.
DR.. Pyles was wen known to many
business men OF Washington He
served in Cuba in the Spanish war
and was formerly major in the Dis
trict National Guard. He will be
Mngton.
There was an absolute dearth of
orders on the local exchange today.
The only transactions We're in Mer-
vance of a point, and q few shares Of
Lanston at 58A,