The Washington times., 1929-02-21
RESERVE BOARD
]. EQUAL|ZES
RATES
BY HARRY GUSACK
Financial Editor

Equalization of rates at which
the IL Federal Reserve Banks are
hereafter to buy acceptances in the
open market was approved by the
Federal Reserve Board today. Previ-
onsly each bank had been making
its bills purchases at rates de-
termined by itself.
The four Western banks, whose
discount rates have remained at 4i2
percent, San Francisco, Dallas,
Kansas City and Minneapolis, have
been buying bills at lower rates
than others The Federal Reserve
hanks of New York. Boston and
Cleveland have been leading the
rate advances.
The board announced its APP
provaI of uniform minimum buy
ing rate for all of the banks. IL
was stated that the minimum rates
are to conform with those already
established by the Reserve Bank or
New York. This places the New
York Reserve Bank in the position
of leadership with respect to the
acceptance market of the entire
system.
New Rates
The lowest rates, according 10 the
Reserve boards announcement, at
which the Reserve banks hereafter
are to purchase bills, will be per
cent for l to As day bills and az
per cent for As to 80 day bllls. blilS
of longer maturitieS are. with lew
executions, ineligible. The board Of
directors of each of the Reserve
banks, as has been the case in the
past, will determine the maximum
rates at which bills are to be pur-
chased by that bank. Between the
minimum rate fixed by the Reserve
board and the maximum rate fixed
locally, the officials in charge of
bills purchases will continue to take
bills at rates to accord with the inn
mediate market.
In making it's announcement the
Reserve board allowed the effective
minimum buying rates of the Re'
serve banks to be published for the
first time. These are usually kept
secret. e
Up to the present time the diff
ferences in the purchasing rates of
the IL Reserve banks have resulted
in offsetting the efforts of the New
York bank to cut down its bill hold.
ings. Decreases by other Reserve
banks were slight. In some cases
holdings were advanced. Some of
the dealers declared yesterday that
because of the variation in rates
bills that normally would remain In
New York had been purchased by
Western institutions, which in turn
had sold them to interior Reserve
banks.
In contradiction to these claims,
however. it is pointed. out by local
bankers that the Western Reserve
banks for the most part only buy
bills that are accepted by banks
within their own districts. What
has happened in fact, it was de-
clared, was that a larger proportion
OF bills when drawn had gone to
Western institutions for acceptance,
with commissions for this service
by local banks diminished.
Council Officers
New officers of the reorganized
Federal Advisory Council whose
statement last week in support OF
the Federal Reserve Boards move
to prevent diversion of Federal Re.
serve Boards funds to loans based
on securities so materially strength
ened the credit stand of that body,
were announced yesterday in a
statement given out by the board.
Frank O. WetmOre, chairman of
the board of the First National
Bank Of Chicago, mas been reelected
president. B. A., Mckinney, wee
president of the American Exchange
National Bank of Dallas. Tex, sue
ceeds Col. J. F. Burton, of Wilson,
n. c., as vice president.
Comprising the newly elected
executive committee are these ofIl.
GERS as ex-officiO members, and
William c. Potter, president of the
Guaranty Trust Co, of New York;
L. l.. Rue. chairman of the board
of the Philadelphia National Bank,
Harris Creech, president of the
Cleveland Trust Co., and Walter w.
Smith. president of the First Ma
tional Bank, of st. Louis. Walter
Iichtenstein was reappointed secre-
tary of the council.
Other members of the council are
John Poole, president of the Fed
eral American Bank. Of this city;
j. p Butler. ir., president of the
Canal Bank & Trust Co., of Atlanta;
Theodore Void, vice president OF
the Northwestern National Bank,
of Minneapolis; Peter W. Goebel'
president of the Liberty National
Bank of Kansas City; Arthur Heard,
president of the Amoskeag National
Bank of Manchester and l.. f.
Iipman, president of the Wells
Fargo Bank and Union Trust Co.,
of San Francisco.
Business Bureau Dinner
An interesting evening is prom
ised at the midwinter meeting OF
the Better Business Bureau in the
ballroom of the National Press Club
on Tuesday evening, according to
an announcement by Joshua Evans
ir., chairman of the board of the
bureau and executive vice president,
District National Bank.
Indications are that large mum
her of Friends and members of the