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Show THE AMERICAN FORK CITIZEN, Thursday, March 9, 1961 1 (She Amtf ran Stork (Elton - Published Every Thursday at American ForkUtah- by the ALPINE PUBLISHING CO. ' Entered as Second Class Matter, at the Postoff ice at American Fork, Utah, under the act of March 3, 1879. i i NATION Al CUM URIAl Subscription Rate $3.50 Per Year ... ! .'! J Ih'.Sr '.';"'"", i 'i,,.' j Federal Reserve Changes Policy 1 " One of the early pronouncements of President Kennedy was that short term interest rates should be held steady but that long term rates should be reduced. At the time this was widely regarded as impractical,'' tut" the .Tederal Reserve System has now changed its policy to meet this aim of the President. , . ' During the Second World War and for several years thereafter the price of government bonds was pegged by the FederaLReserve. This was done by the Reserve banks stand ing ready to buy any amount 6f such obligations offered to them. The argument used to support this policy ' was that it saved the government money on ftejcamingr.charges of the borrowing and debt. And thereis no'doubt that it did hold down the carrying charges, but VhaiWs 'saved in this category was offset many times by-what-- the - public - lost through inflation.' . ' Finally, to 1951 the famous Treasury accord as agreed to andlmdeTthisthe Federal Tleserye System wa permitted to stop pegging government bonds. At the time the present chairman of the Federal Reserve board of governor,?, William Martin, Jr., was in the Treasury Department and he has been generally credited with working outvthe accord. Since then the policy has been to buy long" term Treasury obligations only to prevent a disorderly market! Otherwise the Reserve System has limited itself, with only one or two exceptions, to EulOIT Willi AiCOSlUJ yayci. luu litu kvuxc tu iwunu u the "bills usually" policy. There is one more important -historical fact4 that "needs mention before explaining the change just made lay the Re serve authorities. In the spring of 1960 our commercial banking system was 'running with deficient reserves of about $500 million. This was covered by rediscounts at the Reserve banks. - The result was, relatively high interest ratesj both' on long and shprttermy Wrthoiit" announcement or explanation the Federal Fed-eral Reserve gradually began to buy short term Treasury paper in the market. The effect of such purchases is to give the member commercial banks more reserves. Another ef fect is to reduce the yield on such short term paper. This policy ?as continued until the commercial banks had free reserves of oyer $400 million (reserve requirements also were changed) and the rate on Treasury bills was reduct ed by almost one half. One result of this was that ' this. brought out short term rates so much below1 those in some 6: the leading -foreign money centers that large sums were transferred abroad and we suffered a heavy gold loss. A that point the Reserve authorities stopped pumping additional reserves into the, commercial banks, and began merely ' to hold the free, reserves at around $400 million. And it is now generally recognized that short term rates can not be driven still lower without again starting a gold outflow. Now the change of policy that has just been made is for ine f eaerai neserye system to start buying government obligations ob-ligations with a maturity of more than five years. This was such an unusual step that a special news release was issued announcing the new program, and heretofore the Reserve System would never explain a change of policy. The most that it would do was to give in retrospect what it had been attempting.- . . 1 The purpose of the change of policy is to reduce long term interest rates. - And no one doubts' that if enough long term bonds are bought it will, have this result. , i The dangers of a new policy are enormous. So long as the Reserve banks dealt in short term paper there was no danger of a significant loss, because the rice of such paperl does not ,vary much. Long term obligations, on the other hand, are entirely different Their price, can and does swing oyer a wide range, and if the Federal Reserve finds it desir able, or necessary, to sell any appreciable amount of such bonds it will take a loss which could be extremely large. The hope, of course, is that large amounts of the long term bonds will not be purchased by the Reserve System.-If that proves true there will still be plenty to worry about: but no occasion for panic. Back-Log From Citizen' News Columns TEN YEARS AGO year 82 and the year before 82.2. The sixteen year mean Is 65 Inches. At Altamount for the last three years the show depth is 54.8. 58.5, and 64 $ with a mean of 48.8. v "If the next two months continue con-tinue to have the excess of precipitation, pre-cipitation, the flood danger will After compiling the report for be much areater this vear than February, Tom Walker said he it was last year." says Tom. had listed . the three wettest years on record and that this A new Drive-In Theatre will year far exceeds the other two at open In American Fork on the higher elevations. ; , March 30, and will be named the Depth of snow at the Timpan- Starlight. The theatre will ac- ogos divide is 85.4 inches. Last commodate coo . cars. R. O v - Gardner, will ART IN C00KING . . IS EASY, mm' - - m " " . - 4 nager of the buildings. Use paint liberally. It adds to beauty and is property insurance.',; .,--VY''- V: Vv.. 6. Plant lawn and flowers. - May we work" unitedly and effectively In this endeavor. , Mr. and Mrs.' J. F. Walton entertained en-tertained a number of friends at a bridge party Saturday night. Mrs. A.' F. Oaisford winning the first prize and Mrs. o. R. Adam-son, Adam-son, Lehi, second. A, delicious lunch was served from the small tables. The color for the lunch, tallies and favors was yellow and green'. ' A vase of yellow' sweet peas centered each table. Those present were: Mr, and Mrs. L. B. Adamson, Dr. and Mrs. C. T. Jones, Mr. and Mrs. Leonard Chlpman, Mr. and Mrs. Thomas Barratt, Dr. and Mrs. V. F. Houston, Dr. and Mrs. ; O. 8. Richards, Mr.- and Mrs. K. J. Bird, Mr. and Mrs. Frank Oaisford, Oais-ford, Mr, and Mrs. Junius West, Mr. and Mrs. Roy Steel and Mr. and Mrs. R. a. Adamson. The past, the present and the future are 'really one they are today. 1 "T"" Harriet Beecher-Stowe km my i! t i.'0V IIS It p Buy WASCO "Brand HEPTACHLOR From WASATCH CHEMICAL COMPANY 2225 South 5 East Salt Lake City, Utah .Phone:, HU 4-7661 fe-tested, low-cost alfalfa weevil control! Heptachlor insecticide applied early in the season kills wintering winter-ing adults-keeps them from laying eggs prevents damage by the leaf and crown eating larvae later on, Heptachlor con-. con-. trols these destructive pestsjt a low cost per acre. Heptachlor spray or granules are easily applied with standard equipment. xWith alfalfa weevil Heptachlor control you'll get healthier. longer uvea stanas ana narves more uigur tein hay that can mean a saving in the amount of grain you have to buy. You'll harvest more with Heptachlor, so don't delay ... see your dealer today! I Jblw, I (velsicolI theatre. i -' ' ' i The builders' estimate the cost to be $80,0000. The Utah Amusement Co. is the owner and Leon Cartwrlght is President, Presi-dent, , Frank Eastmond, Vice President, Jed Shields, Salt J-axe, Secretary, Robert Jarvls, Salt Lake, Treasurer, and R. O. Card' ner, director. Elder Don Tregaskls, son of Mr. and .Mrs. Lloyd Tregaskls, left Salt Lake Monday for Los Angeles, where he will embark Friday for Pateete,' Tahiti, where ne will serve a mission. TWENTY YEARS AGO Following a successful audi tlon at Cedar City, Howard Nelson's Nel-son's orchestra has accepted a summer's engagement to play at Zion'c Canyon Lodge the coming season, ; i Included In the personnel of the orchestra are Cecil Ray Han sen or American Fork and Thornton Strong of Alpine. The boys feel fortunate as this is the first time a band from this locality has been chosen for this Job. . Mr, and Mrsr willard Devitt, of Moab, formerly- of American Fork, are the proud parents of a baby girl born last week. Mrs Devltts parents," Mr. and Mrs. Ray Ellison motored, to Moab I Sunday to see the new - arrival. Mr. Devitt is atheletlc C0ach at the High School In Moab. Foods you prepare come so", deliciously different, and meal making so delightfully simple '. . . with flameless electric cooking. ; '., ' ' There's no guesswork - selective switches give you a wide range of accurate heat control. little or no water for electric cooking' means foods cook in their own juices and juices are the secret of more flavor.' - - . . , i .r - Flameless electric, cooking is so clean, too! . - UTAH POWER t LIGHT CO. Buy now from your rfeoler.; ; TOTAL ELECTRIC HOME) I THIRTY YEARS AGO The Alpine Stake Adult De partment have assumed a Clean. er City Campaign project for 1931 and In connection with the City will conduct a drive ' to make' American . Fork an even I better Dlace to live in. " : We urge the citizens to' coop- erate In this work, for community communi-ty cleanliness and beauty. 1. Clean leaves, rubbish, trash, - -"etc. from yards. This type of . rubbish should be burned. Leaves make good fertilizer.- Smoke Is .undesirable. . . I 2., Dispose of t manure piles, ! coops, corrals and pig pens, etc. ' ! should be kept as clean as possible. possi-ble. Manure should not be al-. al-. lowed to collect m large piles.1 3. Eliminate V Files :Every i home should have a fly-trap' In operation. If manure piles are properly disposed of, the breed-; breed-; ; lng places of flies would be ' , largely destroyed. . 4. Remove' all dead trees and dead wood from "growing tree! ' " 5. Repair fences, gates, and You can do your banking "from ' when you " t . SM?M 'V We're as near as your We're as "near as your corner mailbox, "open 24 hours every day." You can bank at your own convenience (actually make your own "banking hours") when you use our Bank-By-Mail Service. Save time on busy days. Eliminate standing stand-ing in line. Make cleposits in your savings account or checking account (or both) by mail! - - ';' : -t-Q- o - It's so easy, simple and convenient to bank by malL We supply free forms and pay postage both ways. Look into this now. Peoples State Bank OFAMERICAN FORK V - ' , Member of Federal Deposlt bsurance C(rporauon ' ''v , j. AH dipoilta Inswed to 11009 ' - For friendly help.with all your banking heeds, you can depend on us |