Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-20
Washington Ticker

BY the Associated Press.
In the face of persistent reports that
Washington authorities are compelling
the two largest Reserve banks, at New
York and Chicago, to refrain from fol-
lowing expressed desire to raise local
rediscount rates. the Federal Reserve
Board is maintaining it's customary
silence. Roy A. Young, governor of the
board Saturday was proffered at least
three published circumstantial accounts
OF Reserve Board rejection of New York
and Chicago bank requests for permis-
sion to raise, but suppressed any i'm
pulse he might have had to rejoin or
confirm.
Study of the banking figures which
customar1ly dictate rediscount rate
changes offers little guidance at the mo-
ment, because 1t is quite clear that the
facts disclosed can be set up to justify
raising, reducing, or maintaining the
present rediScount level of 5 per cent.
For the better part of year credit in
most parts of the United States has cost
more than the rediScount figure; and In
security loans very much more. Theo-
retically, when such a situation has pre-
vailed, the outstanding currency and
credit totals should have grown toward
imitation marks, because q member
bank, lending at 6 per cent or better,
could secure new funds from the Re-
serve system at per cent and make
profit on loans.
But the actual fact, which board
members in Washington do not forget,
Is that the banking mechanism has
markedly refrained from taking advan-
tage OF the theoretical possibilities. The
May II report Of the combined Reserve
system showed that the gold reserve
was equal to ISL per cent of the COM
bined total of outstanding currency
the same reserve percentage was 69.7.
Furthermore, the same statement dem
onstrated that banks were using Reserve
discount privileges with the maximum
Of restraint, because of the total of
$914,599. 900 they had borrowed on that
date $739, 1927, 900 was in the form of
bills falling due within IS days.
Thus 1t is quite plain that the Re
scribe Board Is at the moment steering
some uncharted credit seas and may
take any course 1t desires. Maintaining
rediscount rate. under market levels
is unprecedented. but raising rediscount
rates when reserves are piling up is
equally so.
Relatively small numbers of workers
are involved in current industrial dis
putes in the public eye. Chairman La
Toilette of the Senate manufacturers
committee remarked on that point in
discussing the resolution with which
his committee IS struggling-to investi-
gate the Southern textile troubles.
There are about 5000 persons in
volved in the difficulty at Elizabethton,
Tenn, the chairman said, and 1000
more in the North Carolina troubles.
1t is fact that Senate investigation
in previous years has been drawn to
industrial difficulties in coal and steel.
where the number Of workers affected
has run up to scores of thousands. OF
course, this does not minimize the seri-
BUSINESS of the textile troubles, and 1
am not in position to say that the tex
tile situation adequately represents the
national labor situation"
After q careful canvass Of raw mate
rial supply and markets, with the aid
Of governmental branches as we'll as
industrial reports, E. C. Goltra, presi-
dent Of the Mississippi Valley Iron Co,
at st. Louis, is leaving Washington to
establish a new industrial production
line at his plants. The iron company
will shortly undertake the manufacture
of ferro- Manganese, steel ingredient
now made at two or three points In the
United States. but imported to a con-
siderable extent