The border vidette., 1933-10-21
ECONOMIC HIGHLlGHTS
Oct Is, 1888

Oct. Is. 1888
The Federal government has
started q planned and aggressive
drive for credit expansion. The
drive takes many forms. One is
renewed efforts 70 open banks
which rem maiued closed after the
banking moratorium. Another
is to make possible greater Gre
dit freedom ia banks which are
open but are still operating un
der restrictions. Another is to
increase potential bank credit
through open. market purchases
by the Fsderal Reserve. The
public works program enters
into it. as does the proposal to
bolster basic industries with the
government loans. THIS last has
already been dona 10 the case of
railroads; it will very likely be
extended to other industries in
the future.
During the last half.year busi
ness production has shown
steady and sharp rises. Between
March and September, according
to q New York Times graph, the
general barometer went from
about 60 to 79. the high of 81 be
ing reached 10 mid July. On the
other hand, the amount of credit
available for financing this pro
duction has changed very little.
Ia March it stood at Is billions
Of dollars. and ia September at
16a billions. Where production
has jumped q third. credit fscil
tiles have risen only about 3 per
cent. The importance of credit
is we'll illustrated by the fact
that in this country, in these
days. the normal amount Of bank
credit outstanding is $50. 900.
600. 600, while the total money 10
circulation is but S.. 500. 900. 900.
While this credit drive faces
many problems. there is strong
belief ia many centers that it
will be ablo to loosen credit to
the point where any other means
of infation will be unnecessary.
Secretary of Agriculture Wal
lace. the PERSONAL of the A. A. A.
I(Agricultural Adjustment Ad
ministration). and everyone else
in q responsible position in one
or another in the departments
whose mission 10 life is to fiod q
place for the farmer in the re.
covery parade, are in q tough
spot. Today it costs the consum
or - farmer or city dweller-
about 13 per cent more to buy
most necessities Of life than it
did 10 June, when the recovery
program was still largely ia the
planning stage. In the face of
this, the farmer has watched bis
drop steadily. When city prices
touched 16 per cent above the
1918 level. farm prices declined
to 30 per cent below.
AS q result, the A.A.A. came
out the other day with an sn
nouncement to the effect that it
opposed overly rapid rises 10 the
cost of manufactured goods.
The A. A. A. is likewise studying
a proposed food code which en-
bodies q new approach to the
farm problem. Under the code,
minimum prices for foodstuffs
would be fixed. Distributors of
foodstuffs-a q business with q
$40, 600. 100000 annual turnover
would agree to pay more to
farmers 10 return for farm pro
mise to reduce output. Consum
er's counsel of the A. A. is
afraid the code would result in
higher prices to the public than
it can now afford, and this is the
main bone of contention.
1t is the duty OF the Secretary
of Agriculture to keep farm
prices on a level with city prices.
Mr.. Wallace ia as keen as any
farmer to do that. But it's slow
going. One great problem is
that too many farmers are still
disorganized. aud it takes much
longer to get them together than
it does to prepare q plan Of At
tack for industry.
From the retailers standpoint,
September opened fairly we'll
and closed better. according to
Dun & Bradstreet. The upward
trend hasbecome better esta blish.