The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-03-05

AlIuUuSA DEOAGTS loans QSs
clined for the third successive
week. constituting development
in the direction intended by the
central banking officials, the re.
cession- 81, 49,, 000-was below ex-
pectations. The previous week
decline of SOL ,019 900 had been re-
ported. There has been net
reduction OF $113,1e6, 900 from the
peak attained on February 8.
In the light OF the hearings
being held by the Senate Commit.
tee on Banking and Currency un.
der the La Toilette resolution
which raises the question whether
new legislation Is necessary, the
success with which the Reserve
system under the existing laws -
succeeding in its new money pol
icy becomes of more than routine
interest.
Three Effective Ways
If Spectators showed a dispo-
sition to defy the Federal Reserve
1t could strike back in at least
three effective ways. First, it
could exert It's widespread moral
leadership and no doubt influence
public opinion toward security
prices by issuing a public state
ment expressing disapproval Of
the excessive use Of credit in
speculative channels. There is
precedent for such a maneuver.
In 1919 the Federal Reserve Board
issued several warnings before
raising the rediscount rate.
Secondly. the system can fur
Their tighten up the money mar
ket by continuing its new open
market policy Of selling substan.
tial amounts Of United States
Government securities.
Thirdly. If its leadership were
fiouted the system could order
further increases in the redis.
count rate, which thus far in
1928 has been raised from az to
4 per cent.
The Reserve authorities would
be reluctant to increase the redis.
count rate further unless it be.
came absolutely necessary to do
so to quiet down excessive specu.
lation. A further rise would he
distasteful to the system because
of its probable adverse effect on
attempts Of European countries
to stabilize their finances. and
on account OF the chilling effect
II might have on domestic bust.
ness. moreover, AZ per- cent
rate would make New York a.
magnet Tor gold from all parts of
the world. and eventually such
gold imports would ease the
money situation and tend to nro.
mote further speculation, in the
long run.
RockefeIler's Caution
John D. Rockefeller. ir AZ tbe
annual meeting of the STANDARD
Oil Company of Indiana. welded
the big stick extremely +inoidIv
he ana MS associates abstained
from voting for or against Roh.
ert w. Stewart, chairman ~ +La
board of directors, whose refusal
to answer the inquiries OF Sen.
atOrs concerning the oil scandal
met with Rockefeller ayowed
The younger John D. evidently
wishes his business acts to square
with ms conscience, as articulated
In pubic addresses. Yet he has
hesitated to act boldly.
Evidently he felt that he could
be patient, in view of Stewart's
earlier statement that the stock.
holders could have his resigna.
ton at any time they felt his
attitude embarrassed them. AS
an associate of Rockefeiier ex.
planned. Mr.. Rockefeller has in
his correspondence and in his
testimony indicated clearly that
Il and when he felt that Colonel
stewards resignation should be
had. We would not hesitate n
request it as far as his stock ia
concerned"
The Rockefeller stand would
seem to be that, if Stewards
alleged wrongdoing consists solely
1t may not be necessary to .eust