EXPANSION OF CREDIT

Evening Star, Issue 21433, 9 June 1933, Page 10

EXPANSION OF CREDIT

AMERICA'S EXPERIMENTS PUBLIC WORKS PROGRAMME. WASHINGTON, May 29. ' Acceleration of industrial and trade recovery, particularly by means of the expansion of credit, is described as having the undivided attention of tha President, Sir Roosevelt, these days. The Federal Reserve Banks have begun large-scale purchases of Government obligations, the result of which is to increase the volume of funds t the disposal of the member banks for aas to industry. Whether this -move will prove successful remains to be seen. It failed last year, although the reserve harks purchased more than 1,000,000,000d0l worth of Government securities. Hither industry would not borrow or the banks would not lend, or both, and as a result the money failed to achieve that velocity which is essential to raising commodity prices. Credit expansion will avail naught, it is pointed out, unless there is business activity to be financed. Mr Roosevelt purposes to accelerate business activity tremendously within a few weeks by means of his 3,300,000,000d0l public works programme. To finance this Government bonds will be issued. The President is confident that the Government can control any extensive currency inflation. Meanwhile, there is a minority party in Washington fearful of the President’s huge experiments. One authority estimates that 80 por_ cent, of the American people are with Mr Roosevelt, even in his most radical experiments, and probably the country : an stand the shock of the failure of cue or more of them more easily than it could stand the fatal inactivity that marked tiro Administration before Mr Roosevelt’s arrival on the scene.