Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-11
Washington Ticker
BY the Associated Press.


plished what Federal Reserve Board
officials have desired for long time.
The loans to brokers and dealers, held
by New York Federal Reserve member
banks, have ecreased-undoubt IN
response to the recent drastic breaks
on the stock market.
For the first time in eight weeks the
brokers loans diminished during the
week ending october 9. But the de-
crease, totaling sol 100000, still places
the speculative loans at unusual heights.
only below the figure Of the week OF
September rs, two weeks ago. Reserve
Board officials were loath to predict the
future course of the loans, but financial
observers were expectant that another
decrease would occur next week, releas-
ing additional funds for use in busi-
ness.
The drop in loans, which totaled
$6,713, 100000 for the past week, as
compared to $6,804 100000 for the week
ending october 2, was the first decrease
recorded since the week of August IA.
That week responded with decline to
the increase Of the New York Reserve
Banks rediscount rate from to per
cent. But the following week, that end
ing August 81, recorded a sharp gain
Of $139, 100000.
New Theory Presented.
The steady rise Of the brokers loans
from the week Of August IA ranged IN
weekly increases from sos, 100000 to
$l39. 600 900, until the week of Septem-
Der IS, when q gain of 1892 900
brought the total loans to $6,761 900 900.
Prior to the week ending August IA the
loans had increased for four successive
weeks.
Reserve Board economists are pre-
sented with very interesting theory as
O result of the loan totals of the past
few weeks. The loans increased vigor.
ously, despite falling stock prices, and
last week, according to the index chart
of their course, the curve of the loans
crossed and topped that Of stock values.
In the past this has been interpreted
on the stock market as guide post OF
drastic receSSions in security prices, and
apparently it reacted that way-the
market became topheavy with loans
and stock prices promptly dropped. Ac-
cording to some observers of stock fluc-
tuations there have been similar situa-
lions of overweighted brokers loans in
relation to stock prices in the past, and
the stock market broke each time, June
and December, 1928, and March, 1929,
being examples.
In the loans for the last week New
York banks took advantage of the
stock market conditions to withdraw
their funds, Topping of $98,000,000 with
total of $973,000000, compared to
$1,071 100000 for the preceding week
with seasonal needs of local industrial
credit, too, continued their withdrawal
Of credit with a decrease of $27, 000, 900,
the totals being 81, 799, 900 900 against
81, 026, 000, 900. But corporations and
individuals continued to place their
money in this form Of loans, recording
q gain of $4,000, 900 with the totals Of
1924 100000 against $3,9o7, 100000.
Hands OF" Policy Noted.
From a high governmental source
there Is reiteration of the policy of the
United States to keep hands of" OFF,
cially, although observing closely
through the participation OF expert
private American bankers, of the bank
Of international settlements, the plans
Of which are being formulated at Baden
Baden, Germany.
The proposal put forth by the organ
ization committee of the international
bank that each central bank possess
absolute veto rights Of activities Of the
international institution was regarded
In governmental circles in Washington
as "feeler" to bring about favorable
attitude on the part of the United
States for official participation. But,
although the idea was considered an
ury officials, there was no official indica-
ton of a change of policy by the
American Government.
However, American officials close to
the administration are very anxious
that the United States Government not
be put in the light Of opposing to the
international bank for fear of injuring
its successful formation. The policy OF
watchful waiting-and the possibility of
no oficial participation by America in
the future-is based upon two reasons
by Washington officials. One Is that
the United States has but a small
financial share in the German repara-
lonesome $500, ZOO, 000-and secondly
the law at present forbids any official
of the Federal Reserve or the Treasury
to participate in such an international
banking scheme and 1t undoubtedly
would be a considerable step to con-
vince Congress to change this regulation.
The participation of two leading
American bankers In the international
bank, albeit in unofficial capacities,
lends the United States an Inside" post
Of observation in the institutions opera
tions. The American bankers will be in
close touch with the Government here
so it will be fully informed of the in
stitution's operations. In official circles
the attitude was generally taken that
If the bank is formed opportunities will
occur which will give the United States
proper vantage to participate officially
If the present policy ever should be
revised.
Twists in Commerce Horizon.
The favorable visible balance Of trade
Of 1897 ,767, 342 which is recorded for the
United States in the first eight months
Of 1929 presents several incongruous
twists in the commerce horizon Of this
Nation.
The total exports, valued at $3,407.-
239.518 for the period, represents sew
eral unusual and substantial gains on
the part of Americas foreign custom
ers. Canada with a total of 1858, 000,-
600 not only recorded an increase Of
Of approximately $70,000,000 over the
same period in 1923, but took the role
of the best buyer of American products,
and another dominion, Australia, also
showed a sizeable gain of $10,000,000
over the 1928 period, with total pur-
chase of $103,000,000. The increased
economic strength of the British Isles
chases and Argentina took notable
leap from $114,000,000 In 1928 to $145,-
O00, 900 for the 1929 eight months.
But the enlargement of domestic in
dustries and manufacturing took its
toll according to Commerce Depart
ment experts In Germany. Italy. Soviet
Russia and Japan-all of which re-
corded decreases in their buying of
American products. Germany led in
lessening its purchases with decrease
of 10000, 600 and at the same time
increased its imports by $28,0o0,000.
Lannon'S Statistics Startling.
The American business man may be
well startled by the statistics presented
tav QaeTotarv Tann0nf an tho cost Of