| Show I 10 TIlE THE DAILY WASHINGTON J I I Fin Financial a nw Written L Lr r for The Whirligig Telegram 1 i gig I 1 By JAMES McMULLIN NEW YORK YORK Conservative Conservative New Yorkers are more actively hostile to the president since he signed the Lemke Frazier-Lemke and railway pension pension pension pen pen- sion acts Up to that they really felt he was gradually turning in their direction and were hopeful his conversion would be permanent They confidently expected a veto of these radical radical radical rad rad- ical measures and are bitter in their disillusion But keen neutral observers doubt the implication implication cation that he has swung back to the left They explain his approval of the bills on different and subtler grounds Th y point out that the new labor board will have a strenuous chore on its hands to keep radical and arid conservative labor elements in bal bal- ance This is one sample of several impending right and left swing conflicts which will de devolve devolve devolve de- de volve upon government agencies to settle ettle These settlements are delicate and of vital im im- im Its It's not hard to see how discontented discontented discontented discon discon- tented radicals could upset a lot of if given half a chance They're much more likely to make trouble than unhappy Furthermore the new laws new laws will have to go JO through a severe testing process in the courts before their validity can be e fully established The presidents president's signature is not the ultimate step In m their acceptance by the nation Put these two factors together and what have you A gesture which removes two hot hotshots hotshots hotshots shots from the radical arsenal and still leaves the controversial measures open to final in in- in If the bills had been vetoed the radicals would have had much greater op opportunity opportunity opportunity op- op to rock the boat and endanger the stab stability of the whole Roosevelt program Under these conditions wise sources believe the presidents president's strategy is solid and that conservatives conservatives conservatives con con- have no real cause for complaint about his apparent surrender to o wing left-wing pres pres- sure Significant Figures Analysis of June bank statements re reveal reveal reveal re- re veal that the 19 New York Clearing House Houss banks now own over three billion dollars of government securities This is equivalent to 34 per cent of their total deposits and amounts to about 11 per cent of the entire national debt If you look closely at the figures you find several significant indications 1 The apparently insatiable banking appetite appetite appetite appe appe- tite for governments seems to be tapering off The 19 institutions increased their government holdings by net in the Hie second quarter quarter quarter ter as against a rise of in the first quarter 2 Six banks account for second quarter gains of more more than half as much again as the net increase for the whole 19 The six are Chase National City Central Hanover Bank of Manhattan Manufacturers' Manufacturers Trust and Corn Exchange It just so happens that these are the very banks which have shown the greatest willingness to cooperate with the government government gov gov- all along Insiders doubt this is purely purely purely pure pure- ly coincidence 3 Conversely the five banks which show the largest offsetting declines in government holdings for the second quarter are arc the Guaranty Guaranty Guaranty Guar Guar- anty Trust Bankers' Bankers Trust First National New NewYork NewYork NewYork York Trust and arid Chemical The first four are frequently referred to as Morgan banks The Chemical has not been notably sympathetic to the New Deal 4 Even at that the Guaranty Trust still tops all th the rest in iii the volume of governments it owns And the Bankers' Bankers Trust and First I National carry federal securities equal to more than 40 per cent of their deposits well over the average Private Credit Expansion There is no inference that either the banks I which added to their federal obligations or those which showed reductions acted on any prearranged common policy Nevertheless in insiders insiders insiders in- in siders maintain the statistics tell a story The banks which have lately been cutting down on governments are those which have hitherto maintained the highest percentage of liquidity in terms of cash and federal securities They have been the most consistently conservative Their chan change e of policy reflects either greater confidence in the business business' out out- look resulting look resulting in an inclination to substitute more profitable business loans for treasury ob ob- ob or or a feeling that inflation may impair impair impair im im- im- im pair the investment value of government se se- se Probably its it's a little of both These banks are now contributing to private private private vate credit expansion expansion-as as desired b by th the gov gov- The others are directly supporting the government bond market Either might be interpreted a as as' serving the Jovern governments government's ent's aims but the informed believe the latter is more mor appreciated in Washington at t present The The airlines are working out a setup like the Railway Express agency agency- for air express It will be jointly owned by part participating lines But ut therell there'll be no flirting with collusion or other charges Before they make a move the lines Iines wi will make sure they have the blessings blessings bless bless- ings ings' of f both the postmaster general and the attorney general Copyright 1931 1934 McClure NII Newspaper Syndicate b |
