Word: rediscounted
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Dates: during 1920-1929
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...employ an Irish bull, the chief event of last week was one that didn't happen. Despite rumors in and out of Wall Street, the meeting of Governors of Federal Reserve Banks in Washington adjourned without proposing an advance in rediscount rates...
...confident but mistaken predictions that rediscount rates would be increased have proceeded partly from advocates of the classical theory that rediscount rates should stand above open market rates, and partly from apprehensive speculators in a temporarily bear stock market. The opinion of the latter group can be disregarded. But that of the former is entitled to genuine consideration. Undoubtedly as a general thing the bank rate should be above the market rate, and undoubtedly just the opposite is the case today. It may be that the Reserve authorities' decision to leave rates unchanged has been to some extent shaped...
...Treasury has been opposed to a rise in rediscount rates, since such an occurrence would be detrimental to government financing which will be in process until May 20 at the maturity of the Victory Notes. Higher rediscount rates meanwhile would increase the cost of such government financing...
Moreover, member banks are now increasing their mercantile loans by selling bonds rather than by rediscounting. In general, there is very little rediscounted paper in the Reserve banks, despite the current trade expansion. Several Reserve banks could not pay their running expenses today simply on interest accruing on their portfolio of bills and paper. Theoretically they should if necessary run at a loss in such cases; but this has been made impossible by the unjustifiable amounts of money taken from them by the government under the terms of the Reserve Act in 1919-21, under the euphemism of "franchise taxes...
...Throughout the war period, the rates on these certificates by which the nation's floating debt has been financed, have proved a remarkably accurate index to prospective as well as present conditions in the money market. The rates on the present issue of certificates have, like the Reserve rediscount rates, recognized the increasing demand for money by an advance over the previous rate-on the other hand, it is reasonable to suppose that the Treasury foresees only a moderately increased expansion of loans during the coming year, and in consequence money rates only slightly above those now obtaining...