DEALERS AND BANK

Auckland Star, Volume LXV, Issue 277, 22 November 1934, Page 10

DEALERS AND BANK

A FRIGHT AND SEQUEL.

WHAT A BANKER FEARS MOST. HARMONY AND MORE HARMONY. . (By PAUL MALLOX.) WASHINGTON, October 23. The advance publicity work between the New Dealers and the Convention of American Bankers here was so perfectly harmonious that sceptics have been going arouni saying there must ha\e been a deal.

That is a rather harsh thing to say. After all, harmony can be achieved without prearrangenient. The dove of peace has on previous occasions been conceived by spontaneous combustion, although it in supposed to be an extremely difficult jitocess among persons who regard each other in sucli distant relationship as existed between the New Dealers and bankers.

The New Dealers started it by letting the news slip out uiioiliciallv that it was against a central bank. That story hit the front pages two days before the bankers were to assemble. Almost simultaneously, there came an ofiiein I Xew Deal announcement that the silver seigniorage profit in the Treasury was being frozen, that it was not to be used now in an inflationary way. Sixty Per Cent of All Their Fears. If there is one thing the bankers fear more than monetary inflation it is a central bank. These two subjects together certainly represent 00 per cent of all banking fears. In response, the leading officiate of tlio A.B.A. stepped right out and flung a few posies back at the New Deal. They said they did not fear President Roosevelt very much, and that the New Dealers apparently were not such bad fellows after all.

It made the bankers' convention feel as welcome in Washington as if Mr. Roosevelt had gone out to meet the delegates with a brass band.

Regardless of how it all came about, all the wisest new dealers and bankers were very glad it happened. There has been too much misunderstanding on both sides.

As a matter of fact, the central bank idea itself was a misunderstanding. A few wide-eyed new dealers started about a year ago to talk up the idea. No responsible official here ever endorsed it or seriously entertained it. Fully a month before the Bankers' Convention opened, responsible Treasury officials decided to amend the Federal Reserve Act in order to accomplish stronger central credit control, rather than to try to create a central bank. It was carried in this column at the time.

Likewise there was nothing new in the announcement about freezing the silver seigniorage profit. That has been done right along.

So, what really happened was that the new dealers struck down two dead ghosts to calm (lie bankers.- There is going <o be more of that sort of thing in relation to business generally. You might call it "laying the ghosts of business fears." A Brilliant Critic. A New Deal critic stated this trend was suggested also by the results of a conference recently held at White House. The report may not accurately relate all that went on, but, in essence, it appears to be significantly trustworthy. The critic is nationally, known for brilliant comments about some phases of the reform programme. lie is supposed to have insisted bluntly that he could never agree with the Administration until something more was done to bring the Budget into reasonable balance, to clear up money uncertainty by some stops toward stabilisation, and to appease business uncertainty by N.T\.A. reorganisation. That was a large order. The critic is supposed to have agreed it could not be accomplished for some time, even if Mr. Roosevelt -sot out now to do the job.

The upshot of the ensuing discussion was that the critic said he would give the Administration a chance to prove itself along the lines indicated. At least that is the way his friends put it. Another tbinpr recommended by the New Deal critic was the release of Agriculture Secretary Wallace. He received no encouragement on that score. Send It By Post. A high water-mark for using the mails is being established in the A.A.A. They send out about forty million pieces of mail in an average month. This total includes corn-hog, cotton, wheat, etc., contracts, which are mailed in bulk. Also in one month recently the A.A.A. officials answered 1200 letters concerning policy matters in general, aside from the routine mail covering a single crop or subject.

That's education with vigour enough to be what the Russians would call "propaganda."

Marketeers say that the generally better feeling has not carried the market higher because the public is not coming in and buying. Interior Secretary Jckcs is becoming the political spokesman for tlio new deal. His associates regard him highly for his salty phrases, the most frequently quoted being that "Lot's backward-looking wife was the authentic -spiritual ancestor of the American Liberty League."

The firm which is supposed to have advanced most since the depression started is one which has been going around huving up bankrupt properties.— N.A.N.A. '