Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-16
BUFFALO BANKERS
AID RESERVE BOARD
Writer Finds Tendency There
to Encourage Federal Drive
on Speculation.
nv DAVID LAWRENCE.

@psctal Dispateh to The star.
BUFFALO, N. p, June 1k-Co.oper-
alton with the Federal Reserve system
and its policies Is much more evident
here than in other cities. Several Of
the bankers took the position that while
there might BE- room for differences OF
opinion ae 70 how t. achieve the de-
sired results, the Necessities Of the
credit situation required drastic cur
Aailment of speculation.
1na&znuch as there has been dis
Position here to cut down speculative
loans, the policy OF the Federal Re-
serve became q valuable auxiliary to
the banks IN declining to aid In stock
market operations.
Country bankers have been appealing
from time to time to the larger inSti-
taltions here TO help them out with col
lateral loans, but the banks have held
down these smaller institutions and
have thus cut down the volume OF spec
ulative credit Federal Reserve authori-
ties, knowing Of the attitude of the
Buffalo banks, have not therefore been
inclined to question the borrowings at
the Federal Reserve, but have taken
Il for granted that the purposes for
which Federal Reserve money was need
Cd were beyond question.
Borrowing Rate Goes On.
II Is difacuit to find anybody here
ehc sees In the credit situation any i'm
mediate embarrassment for business
though thu cost Of borrowing for COM
naerciAl purposes has gone to 6 per cent.
II Ii not expected now that this Will
be- q permanent condition, but never
taeless 1t had some tendency TO produce
caution in future planning.
AmonK the bankers here there has
bean some discussion Of the speech
made by Michael Cahill, president OF
the New York state Bankers Associa-
Gon, who told q group meeting that ne
believed better results could have been
obtained II the Federal Reserve instead
Of o policy OF public threats had called
into CONSULTATION in each State the key
men In the banking world and laid
Federal Reserve Board. He expressed
the opinion that cooperation would
have been forthcoming. Notwithstand-
ing tight money, there has been IN
Buffalo an increase in deposits, which
would seem to indicate that not all the
available funds have been going into
speculation. The development OF new
enterprises and the expansion OF exist
ing ones Is going on here without inter-
flIption, as Buffalo has had IN the last
few years . renaissance from q COM
H1ercial point Of view.
Good Business indicator.
This Is one of the few cities where
ths commercial aspect of credit Is
emphasized in contrast with the specu-
lative situation It means that business
generally Is good and that the larger
Institutions are not disturbed by talk
Of business recession. It Is evident,
however, that among bankers there has
been no little, difficulty In turning
down customers who wish to speculate
I'm the stock market.
Many would.be borrowers do not I'M
derstand why the banks can obtain
rediscount privileges on wheat or corn
or other commodities in transit when an
important industrial company'S stocks
or bonds are offered as collateral for
q loan and are not accepted. This is
the point which the Federal Reserve
policy has failed to clarity for the ben
eft of the. average business man, though,
70 be sure. here and there it Is clearly
understood that the board foresaw the
danger OF allowing the limited amount
OF credit available 70 be diverted to
speculation, circumstance which
would have prevented crops from NOV
ing and would ultimately have made
many of the stocks and bonds offered
a. collateral less and less valuable.
tcopyright, 1879. by The star)