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

basis for the ~currencies Of various
countries. Il has influenced our
credit situation and the policy Of
the federal reserve board.
=. Fight Speculation.
Between June 80, 1927 and June
80. 1928, there was an increase Of
more than $500, 600, 900 in the total
amoEnt OF credit the federal reserve
banks were called upon to provide.
due 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 10 the traditional
reluctance of American banks to re-
main IN debt and the policy Of the
federal reserve banks to discourage
continuous Indebtedness the banks
found themselves at the close of the
year IN a position TO lend 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 II 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 s%ecuri-
ties was stopped and more than
sim nnn 80 Unurwa4Fum ~- -
Meantime discount rates were rails
ed from 3 IL per cent to Z per cent.
Make Second Increase
However, the action taken early
M the year unqUestionably was not
effective with reference TO specula-
ion. partly due to the activities of
powerful groups Of SPECTATORS and
partly due To the fact that the public
IN gneeral believed and acted a. III
prices Of securities would indefinite
If advance"
When IL became apparent last
March that repeated increases in
credit were taking place for specu-
lative purposes the federal reserve
bank, he says, resumed its sale Of
securities and discount rates were
advanced 70 , per cent IN all the
districts except those Of Kansas City.
Dallas, Minneapolis and San Francis
60 where they remain at { IL per
cent.
in the banking situation loans
and investments of an banks In the
country increased IS, 800. 900 900 or
about & IL per sent. he points out.
This was the largest growth since
fhn rsynV nwHHnVw FrNA On rnUH
The total ordinary receipts Of the
government for the last fiscal year.
Secretary Mellon places at SI.O42.-
34S.l56. a decline of ssh zoe, 900 ~
compared with the previous fiscal
year. Customs receipts declined $50
100000 20 S569,o00,0 600 while income
taxes dropped S5l. 100 900 to s2,l73,-
100000 Miscellaneous internal rev
cnuc taxes declined So. 100000 10
S62l goo 900 but payments from for
cign governments increased $500
600 TO S20S, soc. eco.
Surplus on Hand
The total expenditures ~chargeable
against ordinary receipts for the fis-
cal year. the secretary fixes at 3d.
6I3. 5l9.S75 or Sl49. 1886. more than
M the preceding year. The total or-
binary expenditures were S3.l03, 26I.-
S5I or Si29,235.IS0 more than the
previous year while it required $780,
255,020 for public debt retirements.
$50, O,lI6 more than in the preced-
ing year.
For the year the surplus Of re-
ceiptS over expenditures amounted
70 S~j5s-S2s,26l but most Of II. w
s16l Sos. 40 had been expended IN
the end Of the year in public debt
retirements. II was S237, zoe, 900 less
the year previous.
AT the close Of the fiscal wear the
gross public debt Of the United
States government amounted TO ST.
Goa .290 sos and the net cash balance
an the general fund OF the treasury
was $3.50. 90,33l. The figures repre-
sent a decrease or $9O5. ss3. 7O3 in the
public debt and an increase Of S27.-
592.2l0 IN the net balance for the
year.
IN closing his report Secretary
Mellon r%eiterates his suggestion
made a year ago that re-
move the surtax from government
securities as well as the normal tax.
This, BIC says would remove the dis
advantage OF the government as COM
pared 20 state bonds.