Word: rediscount
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...Federal Reserve Board in Washington last week established 3½% as the rediscount rate for the Federal Reserve Bank of Chicago, and there was anger in Chicago...
Before the Federal Reserve Act became law in 1913 and was still in discussion, local bankers wanted the rediscount rates fixed by the proposed regional banks. The late William Jennings Bryan and his Democrats opposed that idea vigorously. The rates, said they, should be established by some central in-stitution?the Federal Reserve Board. The compromise: the boards of directors of each of the 12 Federal Reserve Banks were to submit to the Federal Reserve Board at Washington for approval, a rediscount rate for their particular region. The Board was presumed able only to veto, not to initiate rates...
...district banks, however, during the early years of the Federal Reserve Act circumvented the Board by neglecting to offer changed rates of rediscount for Board approval. Then came a ruling requiring each of the banks to submit their rates weekly to the Board for approval. The Board...
...dealer sells the customer's note to a credit finance organization for less than its full value, that is, at a discount. This organization in turn may want ready money for fresh purchases of mortgages. If such concern has been investigated, approved and licensed by the American Rediscount Corp., it will be able to get the cash readily. This is just what the Federal Reserve banks do for ordinary commercial paper. But the American Rediscount Corp. will be able to go further. A private corporation, it can make transactions that the Federal Reserve banks would not or could...
...Rediscount thus becomes facile, and just because of this facility the new company can enforce strict credit terms if it so pleases. Already it has set a gauge for the time-buying of motor cars. One-third of the retail price must be deposited at the time of purchase, the rest to be paid within twelve months. No money may be loaned on cars more than 2% years old, and only 1/3 of the retail price of the model when...