Show 1 I IM KEEP Tn I M MONEY NEY rR FRO M rEGUlA lIN I lation elation of Federal Re- Re sere erve and ad Stock Market Outlined by Banker W YORK Dec 12 When When the thed d cral r l reserve i erve system was organ- organ It r common expectation that 1 t wa was ld redu reduce the amount of bank- bank employed in stock mart mar- mar but there has be been beri berick n t operations ck ot Of funds for tor stock trading ufe co the system got into a action 18 George E. E Roberts vice the National City bank bank N New Nw w wo As- As o ork k in the American Bankers' Bankers Journal Joural issued here today care total otal loans reported by ember banks of or the tho th system show WaS jj as nearly as can cn be ted the Increased demand Ifor alt in the post Jt year as between stock operations and com com- uses has been in the ratio r. r for tor the former forer to 2 for tOL the tIer although commerce still is tt hief hIet factor In the money marIe mar- mar says sas the back door of ot re- re rye Ie credit is open to speculative v tes and without doubt g has been taken of ot the flyr during the past year Mr berls says In part T To manner in which money or relit edit rushes to the stock market marketan an upward movement attracts ral attention is no o different o tho m manner In which inrushes tho grain grin market farm landsI lands I ii Beach lots jots or to a. a e new flew oil 01 di Speculation Js is legitimate but 11 be overdone and when this cuts ibe the Inevitable reaction will wl effects outside the Imme- Imme t concerned For this son n federal reserve credit which a reservoir especially inn in- in n d to t safeguard the general generalI I ness situation should not be e upon to support a speculative om S oE EDIT lT EXPANSION How Jow to prevent prevent It however Is r lcm Credit cannot be kept watertight compartments AC Am A C m ier er bank may not pass up to to- serve erve bank any loans secured cit ick c ind bonds but it can pass pas f ible paper and lend the pro- pro in the stock market Alth Al- Al 1 th lh reserve bank Is not a a. ato to iho hP transaction It i Is evl- evl 0 that its resources are drawn upon for foi fot the field There has hs been no ex- ex 00 of credit credit In the commercial tn the past pt year which would Id I or or an un advance ance ad of the discount in Ul there h has s been o. o 0 great ex- ex x x- x n In the speculative field and I mand man for there has not raised interest rates tes on oct colI col col- a 1 I loans but pulled up the r rates tes paper i 1 th lb t the hr I member banks able to punt um eligible paper Impel at 3 per lC nd ad lend the proceeds on colI col- col I I security at 4 4 or 5 per pern perthe n the he back door to reserve credit i to speculative activities and Ut doubt advantage has been lut ot of the opportunity during ant st y year yal In tho the war post-war om the reserve banks were drawn to he Inflation so 30 fir far far that when hief need for their services they had little power of ot exon ex- ex n on remaining That never nevel Ji happen happe a again aln In normal noral kne es the r 1 sources o ces of ot the reserve resene mi should be kept mainly In to ro- ro fOI for U when an an emergency I to C resources should C allowed to contribute to spec spec- o t 0 excesses ex es el DISCOUNT RATE Roberts points out that the passion of or edit credit since the It of the tho ve has been outside sew ew York federal reserve hat credit obtained from the i It York lurk banks B has nuL an In the stock mar- mar and therefore tho the Ne New rk bank had good reasons r not lot advancing Its r rediscount evon eln 11 0 though ten other reserve reserves Ik s I had Also so c a a rIse In the IV York Ork rate would attract gold brad 1 making England's gold goldi i problem more difficult d speculation In this n try try in regard to io the n hat tt the r rosi rye IVO banks hanks should u UIO o 0 to rediscount eligible paper ember banks bank who are aro extendS extend extend- p for tor speculative uses he her heT heis hes S 'S s T r i 18 is an nn exer exercise lse of ot author- author I 1 would have to be used use tt t resIn inu discretion but the theU th I It t U 1 proposition that a aa way abe a be fund to prevent the rey re re- re System y tem from contributing to ion IH is incontrovertible it I U Is II ear eur that a I rising discount rate elf can be relied upon to give degree of or The Tho I cot nt rate however has ha a n payI pay pay- t which is of great uc ce e. e ThIs has ha been demon- demon demonn 2 n re nt ni eks 1 1 w by the re- re ts or Of thu moderate action acton of th the ne Ie bunk banks The he disturbance ut lut of oi U II proportion to an any bongo I nJ In available credit but gher was as accepted na ns that tb supply W was S running nil 1 d th lh thi- thi long period ot of cm n cS easy terms term approaching the C V 1 YOm COTTON noc n. i u AP AP Cotton quiet miming l. l J DOo GOc futures future I tidy I 1 t II 1 10 20 0 poInts net r Junu tl i cc f 9 c March S W Ii 90 1 a toil toil- lOGic c July i 11 S 1 qc II CrI 1 I 12 At 1 Coffee AI 0 o. o 7 l into No 4 o. o 4 2 c to- to c fir firm c. c O. 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