The Washington times., 1929-10-31
ENGLAND CU 5
BANK RATE
To SIX

LONDON, Oct. 81 S).-The
Bank of England today reduced
the British rediscount rate to six
per cent.
The reduction in the bank rate
from six and one.half per cent was
not entirely unexpected in view
of the influx OF gold to the Bank
Of England and the large decrease
In the withdrawals of gold by
France and Germany.
Nevertheless it caused high
optimism among traders on the
British markets who foresaw
promise of easier money a bolster
ing effect on the prices of stock
securities.
The Bank Of England's reduc-
ton in the rediscount rate to six
per cent was viewed today by high
treasury officials as an indicator
that the New York Federal Reserve
bank would cut it's rates to prob
ably five per cent in the near
future.
The English reduction was due
to the virtual certainty of easier
money in the United States, brought
about by the stock markets col
lapse in prices, it being no longer
necessary to maintain the six and
one-half per cent rate to protect
the British gold and exchange
situation.
It was pointed out by Treasury
officials that it would be of
especial advantage not only to
British domestic trade but to the
interna tional flow of commerce
that the rate at the Bank of Eng
land should be as low as suitable
in view OF the world money situa-
ton.
English Selling
Officials pointed out that there
had been much selling by invt stors
in London on the New York stock
market in the last few weeks. This
resulted from the American domes-
tic situatio anl the fact that
there had been a sharp break on
the Lonon stock exchange. Eng
Iish investors were selling in the
United States to obtain capital 70
protect their positions in their
own market.
1T is desirable that the British
rate be as low AS possible in view
of international conditions an
official said.
"In England the cost Of credit
to business is based closely on the
Bank of England rate. This rate
was ADVANCED months ago to pro
tect the British gold supply when
high interest rates in the United
states were attracting gold in this
direction. These high rates resulted
In shipments of gold to this country
as we'll as to Paris and the Bank
Of England feared a depletion in
their reserves.
The reduced rate means that the
bank feels the situation warrants
this advantage to commerce..
Financial experts of the Treasury
called attention to the fact that
during the last seven or eight years
there had been normal spread OF
one per cent between the New York
and London rediscount rates.
Will Reduce Rates
"The natural presumption is that
the New York bank will soon re-
duce it's rates" high official said.
Likewise the natural expectation
Is the easing Of our credit situation.
The reserve rediscount rates are
adjusted to suit the credit situation
which results from transactions Of
all kinds including commercial and
speculative demand for money, the
exports and imports OF gold, the ac-
cumula ton Of funds at the reserve
banks and financial centers and
other factors
NEW YORK, Oct. 81 O.NSD.-
1f La IF n
rate was considered the most bullish
news in many weeks IN the imam
cial section today.
In the opinion of observers, re-
duction of the Federal Reserve re-
discount r. te when the board meets
today is probable.
1t is known that several of the
largest bankers in the city are
strongly in favor of reduction in
the rediscount rate at the meeting
of the directors this afternoon.
That there will be shown a sub
Rtantial decrease in brokers' loans
after the close today is practically
assured The decline in value OF
many Of the leading securities at
the close of business Tuesday
when the loans are compiled were
tremendous and should be reflected
in the borrowings.
LONDON, Oct. 81 .S).--A"t-
ing in directly the opposite direc-
ton from the Sank of England,
the Imperial Bank of India today
voted to raise it's rediscount rate
from 51a to 6h per cent, accord,
ing to cables from Calcutta.
The 51a per cent rate had been in
effect since last June 6.
3 Children Die in Fire;
Mother Dying of Burns
LA GRANGE. Ill, Oct. 81 Q.N.Sl.
Three children were burned to death