Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-11
BY DAVID LAWRENCE.

PITTSBURGH, June lift the Fed
eral Reserve policy. with its attendant
high money rates. has had an effect on
business In this area 1t is rather an ap-
prehension than a reality.
Steel was never better, and the vol
ume OF business Is so great that those
who might be expected to feel the pinch
of higher rates in financing commerce
are evidently able to stand the addi-
tional expense or they consider 1t tenn
porary. There Is no atmosphere of de.
preston or decline.
But this does not mean that the
Federal Reserve policy goes unscathed
On the contrary, the central point OF
criticism most often voiced Is that ar
air of uncertainty, so fatal to planning
has enveloped the money situation tc
such an extent that companies that
should be seeking new financing are
held back. Most of the larger corpora
tons never were in better cash POSI-
ton and are themselves able to lend on
the money markets of New York
though only few are doing it.
Becomes Rival Bank.
The banks which originally solicited
the privilege of placing money on call
for large customers now look askance
at the sudden appearance of these big
corporations really as rival banking in
situations. During May, for example
the average rate for call money in New
York was about S7-10 per cent, which
was much higher than would have been
the yield to these companies had they
bought gtlt-edged bonds or Government
securities as would have been the case
in the old days.
nesses indicate that orders are vel
ahead Of last year in many lines. The
IV,I Cd
OF recession, but whether 1t is due tt
the end of speculative building OIL
whether 1t Is a settling down process
after overbuilding Is hard to measure
Certainly high money rates have not
affected the opportunity to get first
mortgages, as one large trust company
executive said today he would gladly
buy many millions of dollars worth OF
hrst mortgages on property really worth
so per cent loan.
Study Second Mortgages.
The second mortgage market Is, oil
course, unfavorable, but this is not an
abnormal characteristic nor is it pecul-
lar to Pittsburgh. The Department .oi
Commerce in Washington IS preparing
to make Nationwide survey Of the
second mortgage problem in the hope
OF encouraging large units of capital ia
work out some practicable plan that
Will aid people to build homes on an
1nstallment basis or some other feasible
method.
It is interesting to find in talking
with business people here that they
have little sympathy with speculation
as such, though they wish some way
could be found to curb it without keep
ing the money market jumping up and
down so irregllarly from day to Gav
Anybody who could invent a plan to
stabilize the money market in New York
would find an appreciative constituency
hereabouts. One Of the leading brokers
told the writer that Notwithstanding
the widespread criticism of so-called
brokers' loans, they were amply pro-
tected not only by unusually large mar
gins but by an appraisal of values based
upon last years figures or even those of
the year before. In other words, lend
ing was more and more frequently based
upon the true rather than overinfiated
value OF stocks. He declared that this
had led to much less trading on mar
gins and more outright purchasing, so
that he termed the attitude of brokers
conservative" and "selective."
Dislike Uncertainty.
While there Is the usual tendency to
take fling at any institution in WASH
ington which dares to disturb the even
tenor Of the speculative world, 1t Is,
nevertheless, significant that the prin-
cipal objection is to the creation of an
atmosphere Of uncertainty. There may
be something radically wrong with the
liaison between Washington and the
outside world or between the Federal
Reserve Board and member banks. The