Word: rediscounted
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Dates: during 1930-1939
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...Governments will take to keep francs and dollars unshakably on the gold standard. (Frenchmen are stuffing socks with all kinds of gold coins which they bought in bags on the floor of the Paris Bourse last week. This helped to force the Federal Reserve Bank of New York rediscount rate up to 3½% in an effort to check European withdrawals & hoarding of U. S. gold...
With gold flowing swiftly out of its vaults, last week Federal Reserve Bank of New York raised its rediscount rate to 3½%> a 1%, advance from the rate established last fortnight and 2% higher than the rate which prevailed from May 8 to Oct. 9. Through losses of gold to foreign countries and to U. S. hoarders, the Federal Reserve System showed last week a 61.8%, ratio of gold to deposit and notes outstanding against 67.1% the week before, 78.4%, before England suspended gold payments Sept. 21. Legal minimum is 40%. In four weeks the U. S. lost...
...days before England dropped the gold standard. Some $525,000,000 had left through shipment or "earmarking," against imports of $40,000,000. Squarely facing the Comptroller was another mighty figure: over $1,000,000,000 tied up in closed banks. Gold exports could be stopped by raising the rediscount rate, the money in suspended banks might eventually be retrieved in part but hoarding by the people was a psychological matter, a mob spirit, dangerous, unreasoning...
Such obvious loss of confidence literally forces banks to hoard also. Fearing a run by its doubting depositors it must be fortified by an abnormally large amount of cash in its vaults. To do so they take their eligible paper to the Federal Reserve Bank in their district, rediscount it. If pressed, they must sell their secondary reserve of bonds and stocks in the open market, probably at a loss. Cash on hand in banks is sterile, earning nothing, doing good to no one, a tribute to fear...
Anxious to give business a stimulant, last week the directors of Federal Reserve Bank of New York slashed its rediscount rate from 2% (where it had stood since Dec. 24) to 1½% Money eased throughout the land.* The immediate aim and probable result was to aid England which has been losing gold to the U. S. Over a longer period, agreed bankers last week, it should encourage foreign financing in the U. S., likewise issues by domestic companies. Yet last week the state of U. S. business was such that no sudden demand for funds was expected, no immediate...