FEDERAL RESERVE SYSTEM ENCOURAGING SPECULATION ON THE STOCK EXCHANGE
Federal Reserve System Encouraging Speculation on the Stock Exchange THE McFadden banking bill was ¦signed by President Coolidge after it had passed through the Senate under cloture. This measure...
...But the Reserve banks are anxious to increase the volume of their earning assets, which latterly have been falling off somewhat, notwithstanding the absorption of so much money in Stock Exchange speculation...
...If not, why should the managers of our reserve institutions give adherence to it...
...The level of values was exaggerated way beyond what was warranted by present or prospective yield...
...Is the credit of this country to be used for productive or for speculative purposes...
...Name the governor who vetoed the proposal...
...Prices rose five, ten, fifteen and even twenty points in a day under the influence of manipulation...
...Now come the Federal Reserve banks, and by their action make credit still easier...
...What state by two executions places property rights above human rights' Wh;it great American sculptor has a -itudio in Paris...
...The Board states that for the period, March 8, 1922, to December 29, 1926, "The largest growth, both absolutely and relatively, was in security Joans, which increased 66% during the period...
...The reactionary administration must assume responsibility for the period of dangerous speculation on ihe Stock Exchange...
...i Even the Commercial and Financial Chronicle, one of New York's most conservative journals, is alarmed over the situation...
...Are we not sowing the wind with danger of reaping the whirlwind...
...The credit of the country is being 3ucked down to New York for the purpose of the stock brokers while the rates which AiSSU Fits FOLiSD IN THIS ISSUE Why did a million farmers move to cities last year...
...The last annual report of the Federal Reserve Board shows the extent to which this policy has increased the amount of credit being absorbed on the Stock Market...
...Why should the state help support dependent children under a mothers' pension plan...
...In the coming session of Congress an effort will be made by the Progressives to amend the Federal Reserve Act to stop the rediscount of loans made for purely speculative purposes in order to prevent an undue amount" of the country's credit being drawn to New York to be used in gambling on the Stock Exchange...
...Instead of using its power to restrict credit for unsound speculative purposes, the Federal Reserve banks lowered the rediscount rates making it easier to borrow money for gambling on the market...
...This of course does not take, into account the latest development in speculation which has taken place since President Coolidge signed the McFadden banking bill...
...What city in Wisconsin dedicated a park tr> Senator I.a r'ollette »n Labor Dajr...
...Can you name the President who vetoed a bill to (jive relief tn farmers...
...But is such a policy sound and sensible, and is it in consonance with the theory upon which central banks are supposed to function...
...farmers, manufacturers and legitimate business men have to pay upon their loans, made for productive purposes, remain excessive...
...Gag rule was applied in the Senate and the McFadden bill jammed through...
...The ink was hardly dry following President Cool-idge's signature of the McFadden bill before the Federal Reserve System began exercising its tremendous power over credit to foster the greatest speculation the stock market has ever Known...
...The issue presented is one affecting the entire policy of the control of credit...
...The editorial in the Commercial and Financial Chronicle indicates that this effort may have the support of sound business and financial interests...
...This measure -vave the Federal Reserve System an Indeterminate charter which to all indents and purposes is perpetual...
...They knew that the representatives In Congress of the agricultural states would be determined in their opposi-i ion ; they realized that the sentiment tgainst the Federal Reserve System was growing among legitimate business concerns because of its favoritism to speculation on the stock market...
...The great interests feared that unless ihey tool-, .vantage of the large reactionary majority in the last Congress to obtain this new charter that they would face a fight when the then listing charter expired in 1933...
...Are there not serious portents in the course that is being pursued, and should not these receive careful attention and thoughtful consideration...
...I>o working »rirls falling college courses desire diplomas or a chance to Uiiin information to perfect themselves ;iml their work...
...What federal law encourages Wall Street speculators and threatens losses to small holders...
...In a recent editorial this staid publication said: "There can be no question that easy money and easy credit lie at the bottom of the prodigious Stock Exchange speculation...
...It is evident that the legislative victory won when that act was passed has emboldened the Federal Reserve Board...
...This question must be answered by the people through their representatives in Congress, It is an important question which merits the serious consideration of every citizen...
...So they offer additional inducements to the member banks by reducing their rates...
...They apparently feel that with their new charter they are secure, that they can go ahead without fear of being brought to the bar of public opinion for their vicious encouragement of the greatest orgy of gambling the stock market has ever known...
...What niiikes the rate of cash return for farms half that of corporations...
...With Stock Exchange speculation rampant and with borrowing on Stock Exchange account of huge volume and steadily growing, the true course would be to raise rates, thereby rendering borrowing on the part of member banks more costly and thus discouraging it...
...The Federal Reserve System in 1920 put >ver the wicked conspiracy to deflate igruulture which brought a panic in he farming sections of the country he end of which is not yet in sight...
Vol. 19 • September 1927 • No. 9
