Business: The Fed's Surprise

To the surprise of Wall Street, the Federal Reserve Board last week tightened up on credit again—and immediately stirred up a controversy. In the third such move since last summer, the Fed permitted four district banks (New York, Chicago, Philadelphia, Dallas) to raise their discount rates to member banks from 2½% to 3%, thus allowing others to follow.

The move came as a surprise, because only one day earlier, Federal Reserve Board Member M. S. Szymczak told a Washington audience that the Fed might have followed a tougher money policy were it not for the 4,700,000 U.S. workers still unemployed. His remark...