Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-18
FEDERAL RESERVE
BARES CREDIT ACTS
Part OF System in Stock
Crisis Is Revealed in
Monthly Bulletin.

Explanation Of the part the Federal
Reserve System and the New York Fed
eYal Reserve Bank took curing the criti-
cal period IN the stock market In Octo-
Der in extending credit to New York
banks which took over brokers loans of
non banking lenders is contained in the
monthly Federal Reserve bulletin. made
public yesterday
Combined figures of weekly reporting
member banks in the leading cities the
bulletin said, showed an increase in
total loans and investments Of $780,
600 900 from October 2 to October 30,
nearly all of which occurred during the
last week of the month and at banks
in New York City.
The taking over OF this credit, the
bulletin continued was reflected in a
growth in the last week in october OF
81 500 900 600 In net demand deposits of
the New York banks and of a conse-
ouent large growth OF their reserve re-
quirements. which was indicated by an
increase OF s24O, 900 900 In their reserve
balances with the Federal Reserve Bank.
System Aided Banks.
an coming to the support OF the sit
uation during this period of severe dis
turbance the banks in New York City
had the assistance of the Federal Re-
serve system" the bulletin added The
Federal Reserve Bank of New York in
creased its discounts for member banks
by $150.000, 900 during the week and in
addition purchased s150.000.0o0 OF
United States Government securities in
the open market. As consequence OF
the action of the banks in New York
City and of the Federal Reserve Bank
of New York the liquidation which
too kplsce in the security market was
not associated with a rise in money
rates.
Rates on caO money. which had de-
rlined from a range of TO oeper cent
In September 10 6 per cent in the latter
part OF October, ranged between and
8 per cent during the last week Of that
month"
The board reviewed the decrease In
brokers loans during the latter part of
October. when total reduction for the
month of So 400 900. 900 in brokers bor-
rowings was reported by the New York
Stock Exchange.
Foreign Money Is Withdrawn.
Loans to brokers by on-banking
lenders declined by $4,000 900 900 dur
ing October, rejecting Withdrawals of
funds from the call-loan market by
foreign lenders. investment and trad
ing companies and other corporations
u.
Loans to brokers for out-of- town
banks. which include a considerable
amount of loans for the account of their
customers, decreased by $500. 000, 900,
while loans by New York City banks
for their own account increased by
OIL 900, 900 900
Industrial activity the bulletin said,
while larger in August and September
than year ago, showed a decline for
nRfRAnr q
only because the increases were not as
large as those of 1923. which was year
of high production. Total production,
the report continued, was IL per cent
larger for the first nine months OF the
year than for the corresponding period
of 1928. The total output Of sutomo-
bileS in September was about the same
as in the same month a year ago, the
board said.
Building Volume Holds.
The volume Of residential building
contracts awarded IN September de-
clined. but public works and CONNER
eial and industrial building continued
IN large volume.
Notwithstanding the decline in the
past IL months" the bulletin said. the
volume OF construction. as measured by
contracts awarded. has remained at a
high level. compared with earlier years"
Notwithstanding the slackening of
Industrial activity in the past two
months" the board concluded, factory
employment and wage payments to in
d1strial workers. which has been in
creasing for the past two years. re-
manned In large volume this Autumn.
Earnings Of industrial workers, there
fore, have been maintained, and there
appears to be. no considerable change
in the income of farmers, as compared
with last year. The sustained buying
power of both industrial and agricul-
tural workers has been reflected in a
large volume of distribution of COM
modities by railroads and in a growth
in retail sales to ultimate consumers"