Word: rediscounted
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Finally, the Federal Reserve Bank of New York announced an advance of its rediscount rates from 4 to 4½%. This occurrence provided a live topic of conversation both in Wall and Lombard Streets. Certain features attending it, because of their fundamental connection with the future course of American business, deserve close attention...
This increased demand for funds has at length been recognized by the higher New York rediscount rate, as it has by a similar advance on the part of the Boston Reserve Bank...
Before the war, gold exports could be avoided by raising the rediscount rate, and the swift rise of sterling exchange has caused discussion of the possibility of gold shipments to England lower than had generally been expected. Yet American bankers would be pleased rather than otherwise to witness such an export of gold, if conducted in an orderly manner. Moreover, all things considered, it is doubtful whether England can actually draw on our gold supply in the near future...
Obviously, the new rediscount rate has not been established for the reasons which prompted its advance from 4 to 4¾ in November, 1919. The gold position of the Reserve system was then seriously endangered; now it is tremendously strong, its ratio of gold to notes and deposits being at present 75.8% and 79% for the New York Bank. Yet we now have too much gold for our own good, and much of our present stock of the yellow metal should be re-exported as soon as circumstances will allow, lest either lack of financial foresight or uneconomic legislation bring...
...certificates; drastic taxation will inevitably follow. Under such conditions the amortization of our national debt would be impossible. As an alternative the people may save. New assets would then be accumulated. The inflation of loans which the Federal Reserve Banks has been fighting to the extent of raising the rediscount rates to 7 percent would cease. Our national debt could then be genuinely paid for by savings...