Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-27
FEDERAL RESERVE
QUIZ BEGINS SOON
Glass Committee Prepares
for Inquiry Into Policies
of Bank.
BY JOHN #. SINCLAIR.


ate Committee appointed to investigate
the Federal Reserve policy is soon tc
begin its hearings. The committee con-
sists of Senator Carter Glass, chair
man; Senator Braddon of New Mexico
Senator NorbecK OF South Dakota, SEN
ator Goldsborougn OF Maryland and
Senator Walcott or Connecticut.
What kind or an investigator will 1t
be? Senator Glass, former secretary Oh
the Treasury, answers that question by
saying it Will not be a sensational at
tack. Rather, 1t will be q careful, well
directed study, centerlng on the main
points of a bill which will authorize
national banks to establish branches
within State limits where state banks
are now allowed that privilege, reSCrlcC
chain banking and regulate the use Oh
Federal Reserve FUNDS Tor speculative
purposes.
Senator Glass has made many speeches
against the Federal Reserve system,
contending that it has permitted specu-
lators to divert FUNDS from legitimate
business to stock market operations.
lone aim of the inquiry" says the
Senator. will be to f1nd way to pre-
vent Reserve banks In the future from
allowing their credit TO be USED 1or
speculative purposes"
insist that the investigation will not De
sensational, there are many nnanclai
men who remember the money trust
Investigation of 1918, in which Repre-
sentative G. A. Llnupergh tCol. Linu,
9 bergh's father took Leading role anu
the series of national sensations tnat
grew out of it.
So these men ask: Is another money
trust investigation in the making!
s,Ooo Return to Work.
This morning, between 5000 and 7,O0O
persons employed by the Fisher booy
S.ornoration will resume work IN the
Factories of this country in Flint, MICH.
Ruffalo and Tarrytown, N. Y, James,
vile. Wis, Cleveland and NORWOOD.
Ohio: Atlanta, Ga, Kansas CIy anu
ST. Louis Mo. ana Oakland Cam.
Business is picking up: Inc oemano
for more automobile pooles mas stat eev'
These various plants have been opera
ING on a three-day week schedule. Inc
new orders beginning today swing tne
plants back to their regular f1ve ana
half day week.
Other factories supplying automobile
Tools and accessories are getting ready
70 start up within the next ~ days.
These plants are located In various
parts of the country particularly IN the
Middle West.
was distinctly better than for weeks
past.
Debt Revisi0ns.
In the midst of all Of this discussion
about world debt revision 1t Is wen 10
keen in mind the sharp distinction pc
tween political and an economic oe-
mand.
IF the world price level continued to
drop the economic demand may be-
come insistent enough TO force q world
In talking with Sir Josiah Stamp
during his recent visit to the United
states asked him frankly what effect
q continued sinking Of the price level
would have upon Great Britatn's ability
to pay her debts to the United States.
His reply was:
Great Britain would. be forced to
ask Tor a debt revision If the price
level continued to drop In the next five
years In the same degree as 1t has dur
ing the last five years. Not because we
would desire to get out of paying, but
because the iron law Of economies would
force 1t upon US. We would have no
alternative" e
THAT'S the answer! The Germans
hint they win ask for moratorium on
reparations. It may be political or IT
may be economies. II It is political, 1t
will be ignored. If 1t Is economic, IT
must be seriously considered.
But people on the outside, unfamiliar
with the inside bookkeeping Of the Ger
man nation, can hardly hope to under
stand the situation clearly.
It is a question for the governments
leaders to consider. To the people as
whole, its merely just one more piece
Of news.
Six-HOur Day.
The railroad brotherhoods, with their
1.650,0 900 members, have come out in
favor Of the six-hour day. To the rail-
road executive, hard pressed to meet
present overheads, this new drive
means much. The labor cost Is the
largest in the entire railroad budget,
although in recent years taxes have
been increasing about as fast as the
percentage of gross given to labor.
The railroad problem is extremely
dificult today. Many railroads are just
making their operating expenses. Some
ARE not even making that. One or two
ARE down deep "in the red"
The demand for the six-hour day,
with the same pay as now given for an
.eight-hour day, would mean an increase
of 80 per cent in the hourly wage. Can
the railroads stand 1t? viii it be
necessary to increase again passenger
and freight rates to meet the proposed
additional expense?
The leaders of the railroad brother
hoods viii give the public their side OF
the case shortly. Right now, the chance
for such a wage increase looks small
DR.. william Trufant Foster wants the
Federal Government to cease issuing op-
:timistic bulletins, borrow $4,000, 000. 600
and spend that sum on a prudent
program until business activity is back
to normal
To DR.. Foster the issue Is clear
either increased consumption or de-
creased production. The latter means q
lower standard of living.
He takes issue with Thomas r. Wal
lace, president of the National ASso-
citation Of Mutual Savings Banks, who
says the Nation cannot possibly save
too much, because the money saved Is
mot withdrawn from industry, but goes
into the banks. where the borrowers
get it and put it back into circulation
what q strange argument for q
banker to make at the very time wher
cannot find enough responsible borrow.
ers," answers DR.. Foster Savings de.
posted in banks do no good TO bust.
ness merely because somebody may Dor.
row them at times when nobody doe:
borrow them"
DR.. Foster concludes his argument
against the Wallace contention tina
money saved does not go out Of cir.
culation by asking:
How can bankers cling to that OLD
error. Every time any one uses his saw
1ngs to pay of a bank loan Of a mil
lion dollars, million dollars Is wipet
out of existence. Such q process
Is saving money and wasting men"
copyright, 1880. by North American News
paper Afliance.)
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