Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-25
BY ]. A. FLEMING.


Sooner or later some action looking TO
the enactment of amendments TO the
Federal Reserve law will be taken.
There are too many advocating II. writ
ing about 1t, urging its accomplishment
to permit IL to rest much longer.
Senator Nye, independent Republican,
Is one of its strongest advocates. pro-
testing the injusticeS OF permitting Wall
Street to play longer with the immense
credit of this country.
Brokers loans have been the cause of
a squabble with the Federal Reserve
Board.
Friday morning of last week the Fed
eral Reserve Board announced that
brokers loans o stood at 6,085 ,0O0,-
600 and that the tremendous increase in
loans, to the highest mark yet reached.
was being accomplished by a steady
and almost alarming decline in bank
investments throughout the country.
With the action of the board in ad-
vancing the rediscount rate for the
New York Reserve Bank to 6 per cent,
accompanied by a plain threat to take
more drastic action unless loans we're
reduced, utterly ineffective, the board
may be expected to take further action.
Following the publication Of the Ie-
port of the comment by the board, the
"dlL oOLCCb iIid SSoAAA 49, VI
and generally higher.
The boards next report will be
watched with anxiety.
Committee Reports.
Pred I. Kent, a wheel horse OF the
A. B. A. and chairman OF the COM
merce and marine committee OF the
association, at its last annual conven-
ton, read an able paper, in which he
said:
Credit is the most volatile ele-
ment in production and commerce. 1t
cannot be controlled in certain ways
that have to do with the individual
opinions of those who are in position
to extend it. On the other hand, 1t can
be driven to cover II conditions OF great
uncertainty prevail. even though there
may be nothing intrinsically unsound IN
the situation. 1t is, therefore, to be
hoped that the prosperity Of the country
and its reflection in the continued prog
ress for reconstruction in other u
tries will not be jeopardized by attempt
ed interference by the banking situation
in this country.
1T is also desirable that political pres
sure of every character be Withdrawn
from the Federal Reserve Board. which,
II left to itself to meet the banking
problem for which it is designed, can
uO 81 Hull CAASStA cAAN VANA
less disturbance to business than II its
acts have to be influenced by possible
legislation that might prove to be de-
Structive.
TT is humanity impossible for any
group of men who may constitute a
board to act without promises that de-
preciate their intelligence II they are
obliged to solve problems as they come
before them is such as to pla-
80 ,~olI&,,aI Fonoou fAr Fnnr nf annnlIr-
aging unfortunate legislation instead OF
rendering decisions entirely on the mer-
its of the particular case.
THE Federal Reserve Board. through
the Federal Reserve banks with their
boards, made up of men Of experience in
many lines, and the Federal Reserve
council, through which the opinions OF
experienced bankers a be brought 10
it, is in position, if left alone. to weigh
the problems that come before 1t en-
tirely from the standpoint Of the good
of the country.
1.-THE commerce and marine commits
sion of the American Bankers ASSo-
citation would like to see means under
taken to develop more clearly just what
the facts are surrounding the brokers
loan situation, through a research UNI
dertaken without publicity within the
Federal Reserve organization.
The Other Kind.
There are others who want the public
and Congress to take the matter IN
hand. some there be who would leave
the work to press and pulpit, angry be-
cause of the arrogance of the banks, as
they term 1t, charging banks with feellng
their oats and not caring longer to cater
to- the small depositor, actually driving
them into Wall Street and contributing
to conditions that enable the big cor
porationS to do their own financing
independent of h banks. Iney oo-
ject to the banks making a small charge
on non-paying balances and declare
that banks profit more during hard
times than in the most prosperous:
When all is said and done it Will DE
found that nine-tenths of the credit for
all of this fault-inding is directed
against brokers' loans and the relation
of the banks with the stock market.
Admittedly, there will be a great desire
to delye deeply into banking generaiiy.
A Radical Opinion.
"The growing tendency of the banks
to assume arrogance toward n 1ndl-
yidual depositor, to assert dominance
over industry and to patronize the state
Is hardly justified by the banking record
or by the present circumstances. MOS
assuredly, if the banks do not volun-
tarily check these tendencies they are
doomed to the greatest deflation OF their
pretensions that they have ever expert
enced since Biddle challenged Andrew
Jackson and causd the wreck OF the
only national bank the United States
has ever tolerated"
Bank Mergers Numerous.
The merger movement seems to have
run its course for the present and the
result is 81 amalgamations with 108
banks eliminated, 108 banks established
with deposits of over $4,000, 900 each
and 3 with over a billion each.
Washington has several trust com
panies and national banks with decided
ly important deposits.
Charles e.. Mitchell, daring financier,
chairman Of the National City Bank
of New York, heads the largest bank
In the United States.
George M. Reynolds of Chicago, was
urged back in 1905 by John Black,
one of the founders of the Continental
National and its president, to work for
mergers. Mr.. Reynolds must feel as
If he has much more than realized
the dream Of his sponsor in the fullest.
Good VIII Won.
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