Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-26
RED|SCOUNT RATE
CHANGE DISCUSSED
Reduction Held Likely to Aid
Business and Revive
Stock Market.
BY J. C. RoYLE.

|. Possibility Of a lowering of the redis-
count rate by the Federal reserve dis
tricts Is agitating Government officials
and private bankers here and through
out of the country. One high official Of
the Government today made the sig
nificant statement that up until now"
there had been no occasion for con-
sidering lowering Of the rate.
Many private financiers feel that at
the moment such move would stimu-
late the now Of money into industrial
and construction channels and give as
well q spur to stock exchange activities
This view Is quite apart from that OF
members of the Federal Reserve Board
who carefully avoid any private or on
ctal declaration of their position on this
subject. The private bankers, however
feel that resumption of activity in the
stock market would be not a danger
that In most instances Wall Street is
about two months ahead in forecasting
business trends Sometimes, they ad-
NIT, Wall Street is lamentably wrong
In its conclusions, but in many cases
which they cite the future of certain
industries and countrywide business
trends have been discounted well in ad-
vance by the stock market.
With this thought in mind, they fee
OAA0e a0uASAO1luk hCJAVAby III wall OGIcel
would bring reinsurance to the public
They assert that such an assurance
would be more convincing than the re-
port OF the executive committee of thf
National Survey Conference, organized
at the instance of President Hoover
which declared business had definitely
swung toward normal and that no fur
ther unusual steps to stimulate industry
were necessary. This report, they point
out. came on the heels Of an appeal by
Secretary of Commerce Lamont for ac-
tive steps to stimulate the construction
and reconditioning of dwellings, and II
came following the setting up In the
Department Of Commerce of machinery
to push construction in various lines.
Bankers point out that business men
who themselves are not operating in
any way in the stock market have been
more encouraged by the setting aside
of 100000 shares by the United States
Steel Corporation, to be offered en-
ployes at $3.50 share, than by nearly
any other recent happening. 1t is true
that steel was at its high on Septem-
Der 8 last, when 1t touched 1851 rs, and
that 1t dropped to $3.50 on November
10, but while the price of this security
has frequently dropped below the fig-
ure at which it has been offered to
employees, 1t never has remained below
that figure, and there has never been
an offering in the past which has not
shown a profit to those who accepted
1t and held their stock. The offering
Is accepted in many quarters as an as
surance that the executives and bank
ers of the corporation feel that $l69
represents a minimum for the stock.
1t Is pointed out that a resumption
not necessarily of advancing prices, but
Of activity in the stock market would
have a decided effect in checking the
controversy now raging between Gov
eminent and State labor oficials and
heads Of organized labor as to the exact
status, of employment. Declarations
that the corner has been rounded and
that employment is on the up trend
have been vigorously denied, but the
6enials have been sectional, and so, in
some instances, have been the declara-
tons.
Financiers assert their full realiza-
ton that Wall Street conditions do not
dictate industrial positions, but that
they frequently indicate them, and that
stock market activities have come to
be regarded not as a factor but as a
barometer in business. In consequence
they are watching this barometer
sharply for move to fair and warm
err" A lowering of the rediscount rate
might be the change which would move
the needle in that direction.
(Copyright, 1907