Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-07
INCREASE IN LOANS
ST|RS UP COMMENT
Action by Federal Reserve
Feared if New High Marks
Are Reached.
BY EDWARD C. STONE.

uD lou OF u1JcTGSI aIlQ Al
wall Street. It as the third big ad-
vance recently and has set the financial
world to thinking once more OF the
Federal Reserve Board, the possibility
of more threats" II the loan total COM
tinues to rise throughout the Summer
as it promises to do If trading in the
New York stock market continues to
expand as it has been doing for some
weeks.
Detailed changes during the week
we're an increase Of $2I7, 900 900 In loans
for own account. an increase of $44,-
100000 in loans for out-of-town banks,
and a decrease Of S35,000,0 900 in loans
for others.
Demand loans constituted $685., 0O0,-
900 Of the total, compared with S.
2o4.000,00o last week. Time loans were
$386,0o0.o00, against 1898 100000 a
week ago.
with the Federal Reserve Board
again coming into the limelight, re-
cent comments by the Bankers Maya
zine grip attention. The magazine de-
clareS that much OF the criticism of
the board is not Justified. but adds
that many Of our banking problems
have not been settled for all time. The
magazine, which asserts that the board
with politics and should not even be
domiciled in Washington, says:
Boards Chief Function.
THE Federal Reserve act was born
Of our experiences with monetary
panics. It, particularly grew out Of
the 1907 panic. 1t is, therefore, the
child of fear. Likewise. to some ex-
tent, of prejudice and ignorance. The
chief aim of the measure was to pro-
vide a more elastic system of currency
and credit. This was done by a con-
centration Of reserves and by chang
ing the basis of bank note circulation.
AS to the former. 1t was undoubtedly
desirable to considerable extent, al
though such concentration has been
greater than necessary. The better
plan of issuing circulating notes
may be commended, except that the
notes should be obligations of the re-
serve banks and not Of the United
States. Government notes are avail
able as bank reserves for State banks.
thus substituting Government credit
for gold in the reserves of these insti-
tutions.
THAT the Federal Reserve system
has been of great benefit to the country
in many respects is unqueStioned. 1t
has abolished currency panics-ollt this
could have been done with much SIM
pier mechanism. It has created, or
at least greatly enlarged, q rediScount
system-but now there are several
banks in this country large enough to
exercise this function. They would
have to be endowed with the note is
suing function and to act as cuStodians
of bank reserves In order to do so,
however.
Would Change Selection Plan.
zone need not subscribe to the die
tum that experience Is no guide to the
present, nor assent to the statement
that all economic laws have been upset.
but we cannot be unmindful of the fact
that the banking, industrial and COM
mercial situation of the United States
has been vastly altered by the course
Of events since the Federal Reserve act
was passed some 16 years ago. In the
light of this change, which the some
what limited banking and political
wisdom of 1918 could not be expected
to foresee, reeasting Of the entire
Federal Reserve system may be found
necessary. In making these changes,
care should be taken not to sacrifice
any Of the really valuable features
which the system has developed.
The prevailing mode Is to attack
the Federal Reserve Board for its real
or fancied shortcomings: but II the
present method of selecting the board
Is continued. and II its members are
compelled to act under present limi-
alton will be much improved Link
ing up banking with politics Is wrong
In principle, and of its unsatisfactory
practice we are receiving fresh illustra-
ton. This union should be dissolved.
If regulatory board Is neceSSary-and
It Is not, except perhaps to secure some
unity of action-it should be made up
of bankers or business men, selected
by the reserve banks. Such q board
~ tatl lSiv exfa
but might meet alternately at the chief
banking centers.'
Bank President on Vacation.
John B. Larner. president of the
Washington Loan & Trust Co.. is now
taking his annual vacation at his Sum-
ner home. Mif1intown, Pa. Mr.. Larner
Is one of Washington's best known
bankers and has made q splendid re-
covery from his recent illness brought
on by a severe fall. HIS bank will be
20 years old this Fall and plans have
already been laid for noting this inn
portant event.
Several dividends Of interest to local
investors are to be paid in the near
future. The Security Storage Co. will
pay the regular Quartely dividend
Of Sl,25 per share on July 10 TO stock
holders OF record July 6.
L
dend of per cent will be paid on July
Is. to shareholders of record on June
30 Another dividend which will be
enjoyed by host Of Washington stock
holders will be the a per cent quar-
terly disbursement to be made by the
LanSton Monotype Co. on August 81 to
stockholders Of record August 81.
Eugene z. Thompson, head Of Crane,
Paris & Co., investment bankers. was
reported yesterday as considerably i'm
proved following a short but rather Sc.
dent of the Associated Stock Exchange,
director In the Washington Railway &
Electric Co., the North American Co.
and has large number of other bust
ness Affiliations. For several weeks he
has also been serving as foreman Of the
grand jury.
Since the last bank call the Riggs
National Bank has published a booklet
showing that the institution now has
total resources amounting to $58. 363, 200
The District Bankers Association will
hold a special meeting on Tuesday aft
ernoon at 4 o'clock at headquarters
in the Becker Building.
Klein Writes Fascinating Book.
One of the most interesting books
on economic subjects has recently ap-
peared under the authorship of julius
Klein, director Of the United States Btu
reau Of Foreign and Domestic Com
merce, being entitled Frontiers Of
Trade" It shows how the World War
caused q change by which the economic
interests of the United States we're ex-
panded into all parts of the world.
It covers the whole field Of foreign
commerce and discusses such related
topics as raw material monopolieS.
American purchasing power and invest
ments abroad, as well as the economic
revival of Europe and the Far East.