Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1928-12-05

basis for the c~urreneies OF various
countries. II has influenced our
credit situation and the policy Of
the federal reserve board.
!. Fight Speculation.
Between June so, 1927 and June
so, 1928, there was an increase OF
more than $500. 600 1000 in the total
amount Of credit the federal reserve
banks were called upon 10 provide,
dus largely 10 the unprecedented
gold exports. The increase in fed
eral reserve credit took the form
OF an increase in borrowing by mem
Der banks. Owing to the traditional
reluctance of American banks 10 re-
main in debt and the policy of the
federal reserve banks TO discourage
continuous Indebtedness the banks
found themselves al the close of the
year in a position to enc much less
freely than a year previous"
The secretary reviews the action
Of the federal reserve board IN cas-
ing money rates in 1927 BY purchas-
ing securities in the open market
which was followed by the outward
movement Of gold and a new low
rate for money IN August Of that
year.
AS il became apparent first. that
the objects OF the policy originally
adopted were being accomplished.
and, second that speculation was
growing, the policy was reversed"
he says. The purchasing OF securi-
ties was stopped and more than
100000, 900 of securities were sold.
Meantime discount rates were rails
ed from 2 l-2 per cent to Z per cent.
Make Second Increase
However, the action taken early
IN the year unquestionably was not
effective with reference TO speeula-
ION, partly due to the activities of
powerful groups Of spectators and
partly due 10 the fact that the public
IN gneeral believed aud acted AZ IL
prices OF securities would indefinite
If advance"
When IL became apparent last
March that repeated increases In
credit were taking place for specu-
latlye purposes the federal reserve
bank. he says, resumed its sale of
securities and discount rates were
advanced To , per cent la all the
districts except those Or Kansas City,
Dallas, Minneapolis and San Francis
co where they remain at 1 - per
cent.
IN the banking situation loans
and investments VI all banks in the
country increased 81, 1900 100000 or
about . l-2 per cent, be points out
This was the largest growth since
the year ending June 30 1925.
The total ordinary receipts Of the
government for the last fiscal year.
Secretary Mellon places at Si,O42.-
54S.l56. a decline Of SS7. O00, 900 as
compared with the previous fiscal
year. Customs receipts declined S36.-
500, 900 % $3.50, 0U0, 600 while income
taxes dropped SCI, 100000 u S2.I7S.-
900, coo. Miscellaneous internal rev.
enuc taxes declined So, 100000 to
SOL 600, 600 but payments from for
eiEn governments increased $2.SOO.-
GOO 10 S20S goo. 900.
Surplus on Hand
The total expenditures ~chargeable
against ordinary receipts for the fis-
cal year. the secretary fixes at So
"fSsHA'rofN VI M~At'rsoosDDn, more tnHn
in the preceding year. The total or
expenditures were S3,IO3. 264.-
ssh or Sl29.235,1SO more than the
previous year while II required $780,
255,020 for public debt retirements.
$50, 100,lT6 more than in the preced-
ing year.
For the year the surplus of re-
over expenditures amounted
70 S3Ss, s2s.2sl but most OF Id. "
S36T ,35S.T had been expended Nv
the end Of the year IN public debt
retirements. II was S23T, 200. coo less
than the year previous.
Al the close of the fiscal year the
gross public debt OF the United
government amounted to Sl7.-
500 ,290,563 and the net cash balance
m the general fund Of the treasury
was $3.50, i90.331. The figures reprc-
sent q decrease Of S905.Ss5.1 1908 In the
public debt and an increase IL S27.-
592,2lo in the net balance for the
year.
IN closing his report Secretary
Mellon reiterates his suggestion
made a year ago that congress re-
move the surtaX from government
securities as well as the normal tax.
This, he says would remove the dis
advantage Of tho government as com
pared 20 state bonds.