The recent attempt of the Federal Reserve Board to reduce excessive speculation by a ten percent increase in margin rates from 60 to 70 per cent was hailed as a "step in the right direction" by John Kenneth Galbraith, professor of Economics. Margin is the amount of cash an investor must have to buy a share of stock.

In his testimony before the Senate Finance and Banking Committee last month, Galbraith said that, if the present unstable conditions failed to change, all stock exchanges should be put on a cash basis by raising margins to 100 per cent. "If speculation continues," he said yesterday, "I would certainly want an even further increase in margin rates."

Speculation on the stock market has soared steadily for the past two years. The amount of credit on the market in January, 1954, was $2.4 billion, in November $8.2 bullion, and by last March had reached $4.3 billion. On the eve of the great stock market crash of 1929, the amount of credit was $8.5 billion.

"This recent step should interest those who thought my testimony was so erroneous," he said.