The Washington herald., 1920-05-18
'RESERYEBOARDr
|CONVENES HERE
New Bank Policies to Be
Urged to Curb In :
Rahon.
BIG MEETING TODAY
Distribution Of Bank Credits
For Nonessential Pur-
poses to Be Discussed.

krri hank poiieisS. rigid in their
pin - reduce inAation and TO pre-
vent 90 use Of bank credit for any
hut essential 1s-aoses. probably
'wf1 sbe evolved out OF conferences
befun yesterday between the Fed.
ersl Reserve Board and cfheials Of
the Federal Reserve banks The
hoard met with the members Of the
advisory council for a discussion OF
the general problems existing In
Federal Reserve bank operations.
Today the class "A directors OF
the Federal Reserve banks. repre-
senting the business interests Of
each district. will be taken into the
deliberations.
The conferences are considered
the most important sessions ever
held for q discussion OF the fnan-
cial conditions Of the country. The
important character Of the meeting.
and the dangerous aspects Of many
Of the problems TO be taken up and
considered. indicates the taking OF
some definite action to further the
return OF conditions TO a normal
and safer basis.
Two objects will be held before
the conference in whatever plans
are made TO improve conditions.
One is to reduce imitation. and the
other is that OF the distribution Of
bank credits to the exclusion OF
nonesscntiaI purposes. Bank poll
cies must be adopted and bank op-'
erations conducted to accomplish
these objects. oficials OF the FCd-
cral Reserve Board told the bank
ers. =
Whatever progress is made in re-
ducinE imitation and preventing the
Use of bank credit for other than
Legitimate business purposes. will
be due to the efforts OF the banks
rather than by action OF the Fed"-si
Reserve Board. IL was said. The
working out OF any plans propose -
and adopted at the conference will
rest upon the officers OF the banks
Of the country.
For the accomplishment OF its
objects the Federal Reserve
I Board will not hesitate to take fur
I ther action in the matter Of dis
count rates. or invoking the plans
, Of credit distribution whenever. the
need for such steps becomes sppsr-
. enl- Inc DOdFu. IL Is KNOWN. mas
been considering the advisability OF
: further increasing discount rates
| Whether this action will he taken
will depend on the reports OF
credit conditions existing through
out the country presented to the con
! ference by Federal Reserve bank di-
rectors.
! officials Of the Federal Reserve
banks. after their conference here.
may be expected to lessen the wide
difference in discount rates in favor
Cf paper secured by Treasury certif-
Gates of Indebtedness. A consider
able amount OF the present imitation
is attributable 10 the large amount
Of paper secured by Government Sc
curities and discounted by the Fed
eral Reserve banks. Future issues
, Of Treasury certificates probab
will be sold on their attractiveness
as an investment. rather than as q
highly privileged security.
All phases of the Federal Reserve
bank operations will be discussed At
tn conference before any definite
plans are drafted to relieve unusual
conditions. Any action agreed upon
viii be adopted with the approval OF
the whole conference TO insure It's
observance by the entire banking
community.