The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-03-05
NOTE CHANGE IN
RATE POLICY
BY RICHARD HATTON

AecenC advances in Federal Re-
serve rediscount rates are seen by
Trust Companies Magazine as the
major development in American
finance and business. The maya
zine, also finds that: "As an &C.
compartment to heavy liquidation
OF Government securities and bill
holdings. these rate advances rep
Rresent definite reversal Of Fed
eral Reserve strategy"
y l, The meaning is towfold, says
the editorial quoted above. ''It sig.
miles q departure from the policy
OF fostering easy money, primarily
designed to repel further importa-
| tiops OF gold. Secondly, it implies
determination on the part Of the
Federal Reserve authorities to dis
courage the progressive expansion
and employment of bank credit IN
speculative channels.
Stripped of all transitory and
conflicting trends, the vital concern
fAor business and banking manage
ment is that Of inducing orderly
liquidation of speculative positions,
particularly as related to initiation
OF security market and prices, ILL.,
advised operations in real estate and
artificial stimulation of installment
Enhancing. It remains an open
question whether the Federal Re-
serve board was justified in pro-
tracting its easy money policy on
the ground of International consid.
lerations and in view Of the con.
stantly increasing diversion Of bank
credit into stock market operations
'eand non-1iquid investments. How
ever, the situation has not yet de-
VelQped to a stage which need oc-
lcasion serious apprehensions In
itself the increase in Federal Re-
serve rediscount rates is not more
than an admonitory gesture and as
such, psychological in its effect
rather than controlling.
No Price Control
''To preserve stabilityl and the
lhealthy development Of business.
the responsibility rests not alone
upon Federal Reserve rate or open
market policy. but to a far greater
extent upon member and individual
bank management. AS Secretary of
the Treasury Mellon well says:
Neither the Federal Reserve System
nor any other system can control
prices and the most that system
can do is 10 Influence to a limited
extent. from time to time. the total
volume Of credit and its COSTS" The
actual decision as to the status and
future of American business. lies
with the individual banks and trust
companies Of the country as the
sources OF credit. The salutary eff
feet Of the change in Federal Re.
serve policy will go only so far as
the banks OF the country possess
1.-THE courage and aforethought to
speculative commitments and in a
concerted manner direct credit into
productive channels"
Weather Manufactured
/; Electrical ice boxes will be hooked
up with steam heat, air Washes, air
filters, and giant ventilating fans, to
manufacture perfect weather IN all
seasons for Detroit's mammoth. rev
Union Trust Bank Building, which
Is now under construction.
All tenant Of the new building
will have to do on a sweltering.
Register in his office and re-
.frigerated, clean air, cooled to
Temperature of 20 degrees or less,
will pour forth to soothe hts
lfeverish brow and remind him of
his summer camp. Every room IN
the new building will have it's in.
idividual air control so that tenants
may be comfortable and free from
the city's dust and other sources of
air pollution.
Savings Conference
The next regional savings con.
ference, which will be held at Ricn-
mOnd on April and s, will attract
many Washington bank officials.
This Is one of four regional con-
ferences to be held at the same
time and as almost all banks now
conduct savings departments the
meetings are of especial Importance
az the topics discussed lear directly
upon this angle of banking. Terri
torial units to be represented at
the Richmond meeting are: District
Of Columbia, Alabama, Delaware,
Florida. Georgia, Kentucky, Mary.
land, Mississippi, North and fouth
Carolina. Tennessee, Virginia and
West Virginia.
@. j. Jones, vice president of the
First and Merchants National Bank,
Richmond, is chairman of the con.
ference committee. George L. Wood.
ward, president of the savings bank
division of the A. B. A, and w.
Espey Albig. deputy manager of the
A. NJ. A, will be among the bank
erS taking an active part in the