Word: frb
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Then the Federal Reserve Board, which has little faith in price ceilings or blunderbuss methods, unsheathed a rapier aimed at the heart of inflation: the enormous supply of money and credit. FRB tightened up its installment curbs, then boldly touched off the financial fight of the year; it challenged the cheap-money policy of the Fair Deal and Treasury Secretary John Snyder. In the showdown, it forced Snyder to retreat from his cheap-money policy and let the interest rates on Government bonds-which affect all other interest rates-start slowly upwards, thus tightening the money and credit supply...
Shift of Power. The British measures are roughly similar to those which the U.S. Federal Reserve Board put into effect last March to squeeze the supply of U.S. bank credit. At that time, FRB abandoned its policy of buying all Government bonds at a pegged price (just as the Bank of England has now done with government notes), reasserted the power that had been chipped away by the U.S. Treasury...
Transamerica's expansion did continue; but so did the FRB suit against it. Stern old Amadeo P. Giannini denounced the whole thing as an Eccles plot. In any case, he had been reducing Transamerica's interest in the Bank of America. After old A.P.'s death, his son and successor, Lawrence Mario Giannini, kept on selling Transamerica's holdings in Bank of America, once 99%, until they were reduced to only 7.66%. Said Mario Giannini: "The Bank of America is not controlled by Transamerica in any manner...
Last week Rudolph M. Evans, the FRB governor who had presided over the hearings, disagreed with Giannini. Said Evans: Transamerica's 7% holdings are still enough to give it control of Bank of America. Transamerica's bank acquisitions, Evans charged, "have concentrated more economic power in one small group of men-perhaps only one man-than probably has ever happened before in the business life of our country .. . Not even the great railroad, steel, oil, tobacco or aluminum cases disclosed the existence of greater power in one organization directly to affect the economic life of so great...
...back it with a formal order to Transamerica to dispose of the holdings. Transamerica will then be able to appeal the order to the court. There is little doubt that the U.S. Supreme Court will ultimately have to decide the case, in which Transamerica hopes to prove that FRB's action as prosecutor, jury and judge is illegal...