The daily independent., 1937-04-20
TRADE NARk

/ - y
Georges Court May Escape
Headaches Here; In Bad For
Supreme Court Stand, Corona
ton Trip Would Ease Him Out +;
"Watchful Waiting" FDR'S
Monetary Policy; No new Moves
Planned Yet; Startlingly Sharp
Bond Drop Made Eccles Cush-
ion Reaction He Caused.
Washington-IJ might be inter-
esting to keep one eye on the
European passenger lists to see
whether Millard Tydings, Mary
lands Socialite Senator, goes over
to view the coronation.
His father-in-l law, Joe Davis, U.
S. Ambassador 10 Russia, has in
vited Millard ana his new wife to
90 over as the guests of himself
and Mrs. Marjorie Post Hutton
Davies, the breakfast food heiress,
The Davies have rented a sWanky
house in Mayfair, and the Hutton
yacht, "HusSar," one Of the most
luxurious in the world, will be an
chored in the Thames.
For Millard, the coronation
would be an excellent way out of
his present Supreme Court dilem-
ma. He was one of the first breast
beaters to come out against the
Presidents plan.
Since then he had had a terrific
reaction from his Maryland con-
stituents. Those who make a rit-
ual of the Maryland Hunt Club
races are for him, but unfortu-
nately they don't have many
votes.
On the other hand, organized
labor has.
So Millard may find it aWfully
convenient, to say nothing Of en-
ioyable. to slip over for the cor
onation of King George. 1t would
save a most embarrassing vote
Swing Man
Latest line going the rounds OF
Washington:
We are under a Constitution
but the Constitution is what JUS
tice Roberts says it is
Bond Sag
Behind the scenes, some very
brisk talk has been addressed tc
Federal Reserve Chairman Mar
riner EcCleS as a result OF the
sharp slump in government bonds
There has been lot OF talk II
Wall Street about the mysterious
reason for this slump. but there
! is no mystery about ii. II was du'
primarily TO the fact that the Fed
eral Reserve Board ordered an III
| crease of Onc-third In the cash re-
serves of member bank5, effect
i've May l.
As a result smaller banks, hCay'
ilv loaded with government bonds
dumped them on the market II
order TO meet the Board S require
mcntS.
Mariner ECClCS was responsible
for this increase. He has become
much worried over the spectre o
initiation. knew that an increaS'
j in bank reserves would take mon
cv out of speculative feds. He al
/ 50 knew this would bring an cas-
inc in bonds values. but he eX
pected nothing as drastic as ac
tually occurred.
MorgCnthau Howl
The bond drop brought an I'M
mediate howl from the Treasury
Chief pride OF Secretary Nor
gcnthau is his mancWerlng 0
government interest rates Gown Il
A point where the Treasury pay
only the same total interest
paid under Hoover. despite the oi
national debt rolled up by Roosc
welt.
Morgenthau has raised lot o
the money in the form OF Ghor
term paper, maturing in from ON
TO 5 years. This means that he ha
to keep going back into the mar
ket to reflnanCe every time an IS
sue natures.
Right here was where the &c
cles policy pinchcd. As long a
government securities were abov
par. Morgcnthau could sell his ney
issues at low rates. But now E2
clcs inadvertently had lacked tn
rate on him.
Morgcnthau'S howl was bchint
the action Of the Federal RescrV
Board in convening its Open Mar
kct Committee and going into tn
L, l.