Show TO GUARD AGAINST RAPID V DEfLATION 0 u. 1 S. S RESERVE BOARD TO USE USEFULL USEFULL FULL POWER TO CONTROL CREDIT SITUATION Course Will Be Adopted to Control Cr Credits and Restore Normal In Industrial In V V Conditions in Course V of Time Washington Det Determination of ot the federal reserve board to exert the full power of the reserve reser banking system in tn regulating and controlling the credit situation a course designed to aid commerce an and industry in restorIng restoring ing lag a n war pre I equilibrium was disclosed dis Wa closed in the boards board's annual report made public February 23 3 The board was prepared to test the ability of the system to check ex expansion ex- ex I and to induce healthy dation The board explained It Was fiS aware of the implied power power- to rectify the condition which wIdell confronts the country This power necessarily followed followed fol fol- I lowed the authority for and employment employ employ- ment went of an elastic system of reserve cre credit lt and note Issue it was added Recommendations also were made maee to the congress for amendment of the reserve reser act net which would permit penult re- re banks to establish normal maxImum maximum max max- lines tines of credit accommodation for I member lember banks bank An ascending scale sule of rates would be provided in event e money Ironey was borrowed above the maximum line ine This the board believed be be- lIe E d would work vork to the end that credit expansion on a large scale would be le stopped Warning was given gl that the country mu must t against too rapid ft ton tion It If- was out ont however howe that some sonic remedies employed to correct correct cor cor- inflation might create even wove worse conditions Deflation merely for or the sake of deflation and a n speedy return to normal nor mal deflation merely for the sake of restoring security values and and commodity commodity com corn prices to their war pre-war levels le es without regard for other consequences would be an Insensate proceeding the report said V I |