Word: frb
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...chief burden of the job falls on the FRB (called the "Fed" by bankers), which was created in 1913 as an independent, self-governing agency. Among its functions: to maintain an "orderly market" for Government securities, regulate private and public credit in the U.S. To do this, it has three major weapons...
...Fixing the "discount rate," i.e., the interest which the twelve regional Federal Reserve banks charge their member banks on loans. By raising the discount rate, the FRB makes borrowing more expensive-and thus harder...
...Depression, when the New Deal wanted "cheap money" (i.e., low interest rate) the FRB lost much of its independence. To help the Treasury float each new issue of low interest bonds to finance mounting deficits, the Fed had to support the prices of all bonds by buying enough to keep them above...
...Excellent Prospects." Production is still rising. The FRB's index rose two points in February to 239 (1935-39 equals 100). In the same month, auto production, the biggest since last March was at an annual rate of 6,200,000 cars. For the long pull, even the ousted Fair Dealers were feeling bullish. Treasury's ex-Secretary John Snyder, who had stayed around to help his successor, took off last week, after a White House visit, with the parting word that there were "excellent prospects for a continuing high level of production and consumption...
...high margin was not needed, since most stock buying has been for cash. Outstanding credit on stocks last week was only a mere 1.8% of the total value of listed stocks. By making it easier to buy, FRB hoped to steady the market, which has gone down more often than up in the last two weeks, and encourage nervous businessmen who still think that the market is an accurate barometer of business conditions. Last week Government bonds were also weak. Long-term (20year) issues sold below 95 for the first time since issuance, bringing their yield up to 2.8%. Reason...