Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-11
HOOVER BUSINESS
FARLEY EFFECTIVE
c. of c. Survey Shows Credit
Flowing Back and Read
justmentS Being Made.

the activities of the national business
survey conference initiated by Presi
dent Hoover as part of his economic
sterilization program.
Chairman Julius H. Barnes an
nounced in a statement today that re.
ports show the volume of production
and distribution to be approaching 6
seasonable normal and that confidence
in the future is unimpaired.
The Chamber of Commerce OF the
United States, of which Mr.. Barnes
president, acting independently OF the
survey conference, has submitted rel
erendum to its membership, accompa-
MED by a committee report advocating
the removal of the Secretary OF tine
Treasury from the craftsmanship OF the
Federal Reserve Board In favor OF the
governor of the board.
Establishments Being Made.
In the preamble of his survey state
Ynent Mr. Barnes said, Credit Is nov"
ing back to productive enterprise, ana
taking the business situation as whole
establishments are being mace III al
orderly manner. l.,
while recessions have been noted IN
textiles and in some food producing lines;
and the rate of increase I'M the use Oh
gas and electricity has fallen oil some
what, an upward turn has peen seen
an savings bank deposits and in LIE IN
surance business and, in addition, there
has been an expansion in the total
number of stockholders Of standard cor
To the task of maintaining stability
in our various fields Of business" Barnes
said, the "energy of Americas trade ana
commercial organizations Is being cal.
nestlv, devoted" and confidence ana
mutual support grows naturally among
the directors Of industry"
Prudent business judgment, he de-
clared, is being led by the "ever-expano...
ing requirements OF 12O.OO0,OoO peoples
ia make now 1.-The necessary extensions,
replacements and betterments OF plant
and equipment in preparation for the
future" ,oo
The questions upon which LOO
business organizations were asked 10
vote also included recommendations
that the flow of bank credit into Specu-
lative channels be restricted, but WITH
out prescription by Congress OF pre-
else methods to be followed, ana tnaI
uniform rate of rediscount for all Re
serve banks is "unsuited to our regional
system and to the diversity OF business
conditions"
Most Extensive Examination.
Nineteen questions were presented In
the referendum, which was compiled by
SO leaders in business, labor and agri-
culture after a years study, which the
chamber said was probably the most
extensive examination OF the countrys
central banking system ever under
taken"
The report said that the results,
which are to be made public on Febru-
ary "a, would, in effect. determine the
policies of organized business toward
the Reserve system"
Relatively few of the recommends
lions favor changes in the Federal Re-
serve act itself, and in no instance
was there insistence upon immediate
legislation.
INSTEAD. there is emphasis" the re-
port said, upon the importance OF
capable and politically Independent
MANAGEMENT. and upon the wisdom OF
permitting the system to develop I'M
provements in practice"
Urging removal OF the Treasury mead
from the dominant place on the board:
the Committee said the position Of
governor should be enhanced. and add
ed that 1.-The board cannot possibly
be expected to meet the anticipation
of the trainers Of the Reserve act while
&c continues to include the Secretary
Of the Treasury as its chairman, over
shadowing the governor"
Indeed" the report continued, we
are convinced of the inadvisability OF
including the Secretary OF the Treas
ury as q member of the board.
''It is hardly going too far TO say
that since the establishment OF the
Reserve system the Treasury Depart
ment to q considerable extent has over
Swallowed the board and has TENDED
consciously or unconsciously. 10 reduce
the board to the status OF depart
mental bureau"
Propose Salary Increase.
fine committee proposed that the SAL
aries of board members be increased
from $4,000 TO o minimum OF S3O.OOO
annually for the governor and SIS, OOO
for other members, holding that the
salaries must approach, at least, the
salaries paid In the field OF general
banking. from which Federal Reserve
MANAGEMENT must be drawn.
Recommendations also were mace
that the feasibility Of divorcing the OF
fee OF the controller OF the currency
from the Treasury Department ana
bringing it under the purvieW OF the
Federal Reserve Board be considered.
Entering into the widespread discus
sion Of brokers loans, whlcn lne re
serve Board moved to curb last year
when they were at their peak, the COM
niittee urged that in determining the
systems credit policies, Federal tie
serve authorities, with cooperation OF
the member banks, should endeavor 10
restrict the flow Of bank credit INTO
speculative channels when Such now 10
likely to produce an immediate or pros
pectiye strain on the Reserve or mem
i,x effort
credit accommodation TO commerce anu
industry. ..-
This would be accomplished, however,
without prescription by Congress Oh the
methods to be followed
widespread speculation in any OF
the marketS-real estate, COMMONLY
or security-may make sucn oeIialus
upon the credit resources OF the couh-
try as TO impair their liquidlty or ais
locate the supply available for under
takings involving normal BUSINESS
risk or unduly increase It's cost, the
committee said, In support OF It's rec
ommendation. Speculation in local
or general market may arise from causes
other than the immediate or proSpec-
tive volume OF money or credit.
when widespread speculation is at
tributable in an important part, now
ever, to an over-abundant supply oil
money or credit. it is clearly OF con-
Germ to the system, since it possesses
some power to influence the quantity
and cost of that supply. On such &C.
casions the system can not avoid seek
ing or urging such adjustments in the
credit supply or in the directions OF the
use of credit as will assist In restoring
the proper balance between the volume
Of credit used for speculative purposes
and that used in accommodation 70 ouS'
iness and industry"
SOUTH CAROLINA AREA