The Courier News from Blytheville, Arkansas on March 9, 1955 · Page 3
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The Courier News from Blytheville, Arkansas · Page 3

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Blytheville, Arkansas
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Wednesday, March 9, 1955
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Page 3
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WEDNESDAY, MARCH 9, 1955 BLYTHEVILLE (ARK.) COURIER NEWS PAGE THREB You and the Federal Reserve System; Whether Buying or Borrowing The Policies of FRS Affect You EDITOR'S NOTE: This te the first of two stories showing: how the federal reserve system, by controlling: money and credit, affects Mic dally live* of the nation's citizens. By FIIANK O'BRIEN WASHINGTON (AP) — The other day, John Smith, proprietor of a thriving little hardware store in Centerville, U.S.A., went to see his hanker, as he does each year about this time. Smith wanted to arrange his annual $20,000 inventory loan. Like most businessmen, he borrows to stock up his shelves and repays the loan out of his sales. Smith got his loan this year, but there was a surprise. He had to pay a quarter of a per cent higher interest than last year. "You know, John, the reserve board has been tightening, things up," his banker told him. "Money's scarcer than it was." Affects You Smith wanted the loan for six months, so the added interest cost him $25. Smith has trimmed most of his prices this year, but that added $25 cost of doing business kept the price of many things in his shop a penny or so higher than might have been. Whether you borrow money or merely buy from a merchant who does, you are affected by the policies of the federal reserve system. As the nation's central bank, it can control the amount of money and credit, can make it harder or easier for you to buy things, mid to some extent can determine how far your pay check will stretch. Take another example : Joe Jones went to see his broker. Jones had his eye on a certain blue-ribbon industrial stock. He had so much faith in this stock that he wanted to buy as much of it as he possibly could. If he paid cash for it, he would only be able to buy three shares. But by buying on margin (like making a down payment on a refrigerator, the rest to be paid later) he could get title to five shares. 'A month ago, before 'the Fed' raised the margin requirement from 50 to 60 per cent, you could have bought six shares on margin for the same money," Jones' told him. Or maybe you are a housewife like Mrs. James Johnson, who had wanted a new living room suite for several years. Mrs. Johnson favored saving up the money, so they could pay cash and save interest and handling charges. Mr. Johnson wanted to buy the furniture when they had about half the cost saved up, over a year ago. "The way prices keep going up, we can buy now, pay the charge account costs, and come out ahead," he argued at the time. But his wife prevailed. Helped Cost When the post-Christmas sales came around this year, the Johnsons bought the suite they wanted, for cash. Johnson thought he might just prove a little point, so he looked up last year's sale price. Virtually No Change Mrs. Johnson didn't know it, but 'the Fed' had been working for her nil year long, playing a big part in keeping most prices just about unchanged. Congress established the federal reserve system in 1913. The system has one simply stated, basic reason for existence — to regulate the supply of money and currency. "... to help counteract infia- tinary (boom) and deflationary (bust) movements and to share in creating conditions favorable fa sustained high employment, stable values, growth of the economy, and rising level of consumption." The system's many sided functions have caused it, with equal accuracy, to be described variously as the supreme court of money, the balance wheel of the Economy, and the economy's Irrigation system. 11 mid quarter* Washington The system has its headquarters in Washington, where its seven- man board of governors sits. The president of the United States appoints its governors to 4-year terms, with the consent of the Senate, names one governor to be chairman. The present chairman is William McChesney Martin Jr., son of the man who was the first president of the St. Louis Reserve Bank, at the inception of the reserve system. The elder Martin died last week. There are 12 reserve banks, Boston, New York, Philadelphia, Cleveland, Richmond, Va., Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Mo., Dallas and San Francisco. These banks have 24 oranchcs, and some 7,000 members. T h members are commercial banks— the kind where you have your checking account. Only about half the nation's commercial banks are federal reserve system members but they 'make up the half that holds 85 per cent of the nation's checking accounts. All national banks— chartered by Congress—must be members. State-chartered tanks may belong if they wish. Money Crisis One or the chief reason for bringing the reserve system ink) ^°" being was a series of money scarcity crises in the 19th and early 20th centuries. Seasonal demands for currency, or the year to year growth of the economy, would from time to time outrun the supply of money, and there would be "starvation" periods, when money became so scarce that businesses would fail, or payrolls would not be met. The reserve system put elasticity for quick increases in the currency supply. But currency—actual money—is only a small part of the economic bloodstream. The big part is credit —used in the form of checks. When your bank gives you loan, it does so by increasing your checking account by the amount of the loan (unless you demand actual cash). You can write checks against this new credit, using the credit just like money. The bank actually lends more money than it has, but how much more is determined by the reserve board. The board does this by determining the ratio between deposits and reserves. 5 Times As Much If the board fixes the reserve ratio at 20 per cent, the bank may lend five times as much as the reserve it deposits with a federal reserve bank. But the board may find that there is too much credit, and that as a result prices are rising too fast. It can change the ratio to 25 per cent—meaning the banks may lend only four times the amount of reserves. The bank then must put up more reserve or lend less money, which would make it harder for you to get a loan. In the same way, the board can make more credit available by cutting the required reserve. This could mean that you mighl get a loan your bank had hesitated to give you a week earlier, before the reserve board eased the situation. And, lendable money having rate of interest than you would have paid a week earlier. This 's the first of three main ways in which the reserve system can change the economic climate Tomorrow: Other Credit Controls Steele-Cooter News By FKANKIE ASIICKAFT LEAFLESS Lichens have no roots, stems or leaves. Each lichen is made up ,..,.. ._. of an alga, which manufactures into the picture, providing through j food, and a fungus that absorbs the 12 reserve banks a mechanism and stores the water. embers of the Cooler Lions Club and other local talent have started practice on the annual minstrel which will bi; presented March 25 at Cowr High School. Joe Burton, assisted by Mrs. Burton, will Ix: the director. Tills Is the fourth jvar the Minstrel has been pre;-,<:nt':d by the club. G. F. Urown of near Steele is sc- rlously HI HI the Barnes Hospital in St. I/jui-s, Mrs. Brown .has been with him but came home last week to be with her mother, Mrs. Vied, who pjc-.MKl av;uy Thursday. Tom LtwLs hiifi returned home from P{;mJM;ot Mt-morial Hospital in U;iyti where he underwent treat- mem. He i.s improved. His son, Tommy Duke Lewis, who was confined to his home by sickness last week, was able to return to school this v; ( .'f:k. Shannon Booth, who is with the U.S. Naval Air Corps, is due to arrive home thLs week after several momh> uvftrseaK duly. He will visit hi;; ii!<.ihi;r, Mrs. Macie Booth and ot!u-r relatives. Mr. and Mrs. Ted Harris of Kirkwood yi.-iu>d liis sister, Mrs. Charlie Chirk, and family Sunday Mr.--. D;:i.sf;y Rushing, who has been seriously ill at Blytheville Hospital, it. improving-. Jimmy Calk-ns, who is a student at M-.-.-oun University at Columbia, :;;;f,-!it last weekend here with his parents. Mr. and Mrs. Dee Cali'.-n.-.. Mr. and Mrs. J. W. Neil and children, Jimmy and Lynette, have re- tunif'd home from Waukegan, Mich., with Mrs. Neil's parents, Mr. and Mrs. Alfred Dennis. Mr, and Mrs. Edward Faught. Mr. and Mrs. Floyd Faught, Mrs. Herman Lucy and Mrs. Mary Jordan hiiVfc returned home from Ar- bandak-, Fla., where they were called 10 ihf; bedside of their mother, Mrs. Elli<;- Faught, who is seriously ill. She ih improved. Mrs. Jordan and the children will return to Ar- baniiak Uj make their home. Mrs. V.'oodrow Shelton and Mrs. Sair.iiiie Lester were visitors, in Cap? Girardeau Friday. Li:tip Miss Lynette Neil was the gUP.=L of honor at a pariy given by htr mother, Mrs. J. W. Neil, last Saturday afternoon in honor of her fourth birthday. Miss Jessica Ann Perry, a student at Arkansas State College in Ho Increase In Cost-Price Ratio Seen ST. LOUIS (ft')— True D. Morse, undersecretary of agriculture, said yesterday the government does not expect the cost-price ratio on farm- the same 17 billion dollar level and Morse, who also is president of the Commodity Credit Corp., said in a speech prepared for delivery before the National Agricultural Chemical Assn. convention agriculture is benefiting from the expanding economy, full employment and the high levels of. consumer purchasing power. Morse said the most recent balance sheet for all farmers and owners of farm property shows equities increased from 144 billion dollars to 145 billion the past year, the total farm debt remained at about the same 17 billin dollar level and debt payments are being met. THE Acluol phoio of Hie Plymouth PfaM Club Sedan. TOP CAR-TOP SIX of the low-price S! BIGGEST SIZE, SMOOTHEST PERFORMANCE, HIGHEST ECONOMY Take a turn at the wheel behind Plymouth's new, high compression PowcrFlow 117 engine—see why it's the smoothest, thriftiest 6 in the lowest-price field. Merc's power for all driving needs, plus the supcr-sinoollmess of (he PowerHow's Chrome- Scaled Action. No oilier low-price car has it, and it's your guarantee of more years of gas-saving economy and troublc-frcc performance. Taxicab operators, who depend on cars for a living, buy more PowcrFlow 6's than all oilier makes combined ... they say the Powerflow 117 is the most economical, most efficient 6 ever built! Its L-Iicnd design means fewer working parts, less friction. Its automatic choke meters each drop of fuel. Its bypass cooling system gives yon quick warm-up in cold weather; dozens of other exclusive features promise you lower operating expense. The PowcrFlow 117 engine is one big reason why the big swing this year is to the forward- looking Plymouth. Another is the new 167-hp Hy-Fire engine, the most powerful standard V-8 in Plymouth's field. Plan to drive a big, beautiful Plymouth with either of these two great power- plants soon— how about today? your Plymouth ALL NEW PLYMOUTH Plymouth dealers are IliUd under "Automobile Dealer*— Plymouth" In your Classified Telophont Directory Jonesboro, spent last weekend h.ere with her grandmother, Mrs. Ann Coleman, and other relatives. Mr. and Mrs. Tom Perry have returned to their home in St. Louis after a visit here with relatives. Harlfin East of 'Memphis spent last weekend here with friends. He has re-enlisted with the U.S. Air Force and leaves Tuesday for one year overseas duty. Clarence Gilliland returned home this week from Los Angeles, Calif., where he underwent a major operation. Mrs. Gilliland was with him. He is improved. NOTICE OF ANNUAL SCHOOL ELECTION, LUXORA DISTRICT NO. 2 Notice Is hereby given that the Annual School Election for the year 1955 will be held in Luxora School District No. 2 of Mississippi County, Arkansas, on Saturday, March 19th, for the purpose of electing school directors, voting on school taxes and on such other measures as may properly be submitted at said election. The polls will open at 8:00 A. M, and close at 6:30 P. M. at the following places: Luxora City Hall. C. B .WOOD, President of School Board. R. C. LANGSTON, Secretary of School Board. Given This 22nd Day of February, 1955. 2/23-3/2-9 The Continental Divide r*tni Read Courier News Classified Ads. through the middle of Montana. NOTICE OF ANNUAL SCHOOft. ELECTION Wilson School District No. M Notice Is hereby given that the Annual School Election for the year 1955 will be held In Wilson School District No. 25 of Mississippi County, Arkansas, on Saturday, March 10th, for the purpose of electing school directors, voting on school taxes and on suph other measure! as may properly be submitted M said election. The polls will open at 8:00 a.m. and close at 6:30 p.m. at tht following places: Whitten School and Wilson Tavern. Given this 18th day of Febnwuy, 1955. J. H. GRAIN, President. J. E. GRAIN, Secretary. 2/23-3/2-9 ast buy new; better trade-in, to* KOOLVENT ALUMINUM AWNINGS CALL NOW Ph. 3-4293 FOR FREE ESTIMATE SMITH AWNING CO. AUTOMATIC WASHER Reg. 169.95 Washer $5.00 Down $149.88 24 Months to Pay How on automatic washer at a price most peopte poy for a wringer washer. Washes up to 9 Ibs. of dothet with gentle agitator action. Washes, rinses 4 Brow, spins damp dry, and shuts itself off automatically. 406 W. Main Phone 3-4591 Every Suite On Our Floor Reduced Bedroom Suite Sale Use Our Credit Terms 2-PC. BEDROOM SUITE Reg. 113.95 ft /I 88 84' Two piece walnut waterfall dresser and panel bed. Buy now and save Rep. ?] 59.95 3-pc. Suit $139.88 3-PC. BEDROOM SUITE Reg. 184.95 149' Double dresser, chest and panel bed with modern black handles in a beautiful pearl mahogany. Ask about terms. 2-PC. BEDROOM SUITE Reg. 163.95 <l /• f\88 149' Beautiful light oak finish in new modern design. Large plate glass mirror on dresser. 2-PC. BEDROOM SUITE Reg. 166.95 1 •% f\8B 139' Beautiful triple dresser and panel bed hi harvest oak design. This is one you must see to appreciate. SAVE $30 ON ANY DINETTE SUITE ON OUR FLOOR LIVING ROOM SUITE 88 Regular $189.95 2-pi*ce living room suite. You save $30 now when you buy Wards finest quality 2-piece living room suite. Styled for lasting beauty. 10 per cent DOWN ON TERMS. 159 10% DOWN-LOW MONTHLY PAYMENTS

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