Evening star., 1923-04-01
BUSINESS ACTIVITY
NEAR TO MAXIMUM
Reserve Bank Governors
Told of Great Prosperity
Ali Over Country.
ENOUGH CREDIT SUPPLY
We General Increase in Rediscount
Rate Likely-Foreign Trade
Holding Up Well.
ENOUGH CREDIT SUPPLY
BN HARDEN CoIEAN.

Governors OF the twelve federal re-
serve banks who met here last week
with mcnh,rs of the Federal Reserve
Board have gone back home to SCI
tie locally and with their own inSti-
tutions whether the price Of credit
shall bu Increased as a curb To spccu-
Iatiun. Amy action looking 10 Il rise
in rediscounI rates viii have to
originate with the reserve banks and
will not be brought about by the
action of the board itself. This eN-
plains the statement issued after their
recent meeting here.
The question as to what if any
thing, shall he done to put the brakes
"u rising costs OF commodities and
ON stock speculation. therefore. will
j." answered in New York. Boston.
l'hiIadclphia, cleveland and other
federal reserve bank cities. and not
ll Washington. 1t u federal r,scrN u
bank IN any of these cities believes
that its r"diScount, rate should ht.
advanced. II may make appliratioH to
The board here for authority to MAKE
IN" advance, The board VIII then
aah" the subject under advisemcnt
LI.d render its decision.
General Increase Unlikely.
l,ut before any federal reserve
Gugh acts tn" question must he
placed before its directors ana the
application IL raise the rate approved
~ them. As the$" directors are pri-
NatC business men and bankers, and
Hot officials Of the United States gov
Srument, the problem will thus he
u"tcrminncd. not by the government.
but 10y the financial industrial and
commercial interests of the country,
acting the uuEh their representatives.
With tho ratc-inCreaSe problem
thus passed back to the governors OF
Tho rcscrN" banks. and with their
action dependent upon the wishes OF
1h"lr respective boards Of directors.
is difficult to form an accurate.
forecast OF what the next step will
b". indiCatiuus, however, mIii,at I
against Il general or uniform in
crease. X IS regarded az quite uu-
likely that all Of the banks will seek
10 raise the rate, because at the pres
eu' time III" volume Of rediscountS is
comparatively small and an increa -
~ The rat" in most sections, would
probably tdil to acc omplish Il great
deai anyhow.
One or Two Banks Ma, Act.
II i quit" possible that within tie
Z ~ two weeks one or two of the
eastern banks will make application
Tor authority to announce Il higher
rate.
discussion Of financial affairs the
SoNernors and the board at their
meetings this week reviewed general
business conditions at length. They
found the situation healthy and i'm
proving throughout most OF the
United States. Speculation. accord
ans TO reports placed before them.
h" been confined chiefly TO the east
srn section.
Nearly All OF the banks have huge
reSerN olrs of credit available for
1urther legitimate expansion of bust
ness activities
ot late private capital has been
50 abundant that there has been
ittle call for rediscounts one OF
IN" biggest of the banks has done so
little rediscount business within the
past month that this phase of its
>cuNlty has hardly paid expenses.
Great Prosperity Noted.
Ine survey Of business conditions
placed before the governors disclosed
industrial and commercial activity at
d point near the maximum: labor
employed at full-timc capacity: prices
And wages advancing. and buyipc
l"Ncr great. With the possible ~
Cv"uon OF agriculture Virtually
every line of business activity
showed marked indications for fur
1h"r continuance of activity and
~, '.s7Granle ,.r,7 eY7pansi1ni Eoretsn trade
prospects of increasing in volume.
Within the next few months. the
governors We're advised, the heavy
volume of advance buying probably
VIII result In a degree of industrial
sctiNlty limited only by ptant ca
pJ"ity, the labor supply. transnor-
taii"n facilities and credit
freight traffic surpaSses all pre-
N'ous peak movements for this sea
son. the volume of building construc-
ton tops that of a year ago, auto
lu"hlIc production was heavier ~.
Narch than in any other March sn
history. the steel industry iS.neas-
dFtH as operating at about 9n per
cent OF capacity, with mills and fur
PAGES idIe for years having recently
t"rn put back into service: conner
Jeau, zinc. textiles. leather and ne
troIeum are swinging into upward
stretches. both as to prices and vol
ume OF production.
Business on Sane Basis.
The foregoing reports and other.
q similar tenor. placed before The
governors, created a feeling thar
Nnlie a measure Of caution might he
1dNlSable in guarding against IN
Aatlon In specific Industries. the warn
sthd Woot of the fabric of America n
BUSINESS II strong and sound at Tho
present tune. Speculative tepdencio.
nave been manifested i'm only a feu.
81 the Country's markets; the rest
IN the opinion of the meeting. are
progressing in sane, prosperous ana
gratifying fashion.
CCuryrirht 1909