The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1937-02-06
SENATE ASKS
MONEY REPORT
Would Know Reason and
Results of Federal Re-
serve Board Order
BY GARRETT D. HORNER
United Press Staff Correspondent

WASHINGTON, Feb. 6. (UP).
The senate yesterday asked the
federal reserve board for a re-
port on why it increased reserve
requirements for member banks
to .Le legal limit and how the
move will affect the country.
The report is expected to pro-
vide the basis for decision by con-
grcssional leaders on whether to
seek legislation giving the board
authority FOR further action to
prevent possible credit imitation.
1t was considered significant
that Senate Majority Leader JOS.
I. Robinson, D., Ark, approved
the resolution offered by Senator
Gerald p. Nye., r., N. D., calling
for the report.
Reserve board officials were
said to welcome the opportunity
to explain how the high reserve
requirements are expected to re-
duce the possibilities of run
away credit initiation and stabilize
lOnS-tcTW interest rates.
One official said the report
would attempt to correct what ne
termed an erroneous impression
that the boards action would
benefit bankers by bringing about
tight money" situation. He
said the move will have a stabiliz-
ing rather than restrictive effect.
The new reserve requirements
become fully effective May l,
when they will be twice as high
as last July when the board be-
gan increasing them from concern
that large excess reserve might
lead to credit initiation. The 100
per cent increase is the maximum
allowed by nreSent law.
The latest increase in the per-
centage of funds the banks are
required to keep in reserve is ex-
pected to reduce excess reserves
idle money beyond legal re-
quirements-to about $500, OOO,-
600 from a present total of more
than $4,000, 100000. Officials said
this will be sufficient to support
q credit base of at least $1,000
OO0,. which is considered ample to
finance all business needs and
maintain easy money conditions.
1t thus will reduce the danger Of
a $2O;O00,000,000 credit initiation
inherent in the. $2,000,000,0O0
excess.
The senate adjourned yesterday
until Monday without transacting
any other business. The house
continued debate on resolution
to extend for three years the
presidents power to negotiate
reciprocal trade treaties without
senate approval. Leaders hope to
pass the measure next Tuesday.
The senate finance committee is
scheduled to begin hearings on it
Wednesday. ...'r
i A bloc of congressman from
the Mississippi and Ohio valley
states decided to ask WPA Ad-
ministrator Harry L. Hopkins to
release Immediately ample funds
for flood rehabilitation. Rep. Ar
thur Greenwood, D., Ind, a mem.
Der of the group, introduced a bill
creating an Ohio Valley Author
ity similar to IVA, with power
to spend S2,000,000,00o on a
comprehensive flood control pro-
gram.
Harry w. Colmery, national
commander of the American Le-
gion. defended constitutonality
of bill to take the profits out Of
war at a hearing before tie sem
ate military affairs committee.
The measure would levy = 95 per
cent tax on wartime excess "rof-
its and empower the president to
draft all industry and malpower
into national service as veil as
stabilize prices. Colmery SID TINS
power would not go far beyond
that granted President Wilson
during the World war.
Rep. Henry C. Luckey, DEM,
Nebr., introduced in the buse a
proposed amendment to tie con-
stitution to permit the PRESIDENT
to veto or reduce any itemof any
appropriation bill. a..
Rep. Robert Crosser, ID, omo'
introduced a bill calling fc Sin
hour day for employees Of carriers ,,
engaged in interstate commerce.
Rep. Henry EllenmogeS DEM,
pa introduced a bill directing a
census be taken of population,