U.S.A. CLEAN-UP

Greymouth Evening Star, 9 March 1933, Page 7

U.S.A. CLEAN-UP

BENEFITS FROM CRISIS BANKS RESUMING BUSINESS [BY CABLE —PRESS ASSN. —COPYBIGHT.] NEW YORK, March 7. Aside from immediate dislocation growing out of the banking crisis, the nation’s thoughtful attention is being directed towards several more important long-time aspects of the situation, these being principally the United States position with regard to the gold standard, the problem of a complete banking system reform, and an extensive readjustment of public finances. It is predicted that the United States will prefer to have a “managed currency,” possibly one under some system, whereby its bullion will be reserved for international obligations.

Some form of inflation, also, is considered more oi* less likely, irrespective of what gold policy the Government may announce after the temporary crisis is over. This may be achieved by the devalorisation of the dollar, although official sources strongly disavow its likelihood. The question, it. is believed, closely disavows the problem of preventing too rapid an increase of internal prices. In regard to the question of banking reform, it is clear from the point of view of the ordinary bank depositor that any reform must more particularly aim towards restricting the investments by the banks of their depositors’s funds, in order to avoid anv speculative orgies in boom time.

One of the greatest benefits expected from the present, crisis is an increased prestige and power it will give to the new administration to force radical cuts in Governmental expenditure, thus easing the taxation, and leading to an improvement in business.

The Federal Reserve Bank here has been authorised by the Secretary to the Treasury, Mr Woodin, to resume making advances of currency to its members, provided that they deliver to tho reserve Bank institution all of the gold and gold certificates, which the banks own in their own right, in return for other forms of currency. The New York State Legislature has approved of a plan launched by Governor Lehman for a State-wide issuance of scrip.

Mr Woodin, late to-night authorised Federal Reserve Banks to conduct their normal and usual operations as fiscal agents of the United States in tiansactions pertaining to exchange obligations of the United States. SCRIP CURRENCY ABANDONED (Rec. March 9, 9.30 a.m.) NEW YORK, March 8. With the Federal Reserve system opening its coffers to facilitate the necessities and the regulations clarified, banks in many localities of the United States were prepared, to-day, for more general lightening of the burdens of the emergency holiday, through cashing payroll cheques and providing funds for essentials. Distinct stirrings of business in banks inspired fresh hopes for the early lifting of the cloud of uncertainty. With Federal Reserve banks beginning for the first time this week to provide members of the banks with currency for necessities, the scrip idea began to wane. Because many banks, not members of the Federal Reserve system, have prepared scrip, the plan might develop on a local basis in many communities, and New York State was ready with its new emergency certificate corporation to develop this form of emergency currency. MONEY AVAILABLE WASHINGTON, March 8. Representatives of the principal grain exchanges in the United States asked for a modification of the banking rules to permit the immediate reopening of their markets to both cash and futures trading, on the grounds that food supplies might otherwise be seriously disturbed. Mr. Woodin said, to-day, that actual currency would be circulated throughout United States, in place of scrip or clearing house certificates, under a plan being formulated. He made it clear that the formal plan for scrip or other medium of exchange issue, was being abandoned. HOLLYWOOD’S WAGE CUT (Rec. March 9, 10 a.m.) HOLLYWOOD, March 8. The cessation of activities at all motion picture studios at Hollywood was ordered to-day by the Association of Motion Picture Producers, unless drastic cuts in salaries and wages for an eight weeks period, due to the. banking situation, are taken by employees and artists. The Board of Directors of the Academy of Motion Pictures, Arts and Sciences shortly after the ultimatum, recommended its members to take the. reductions. For salaries more than fifty dollars weekly, a cut of fifty per cent, for the eight weeks period will be made, with a minimum of 37f dollars. Those earning less than fifty will take twenty-five per cent. cut. with a minimum of fifteen dollars. The cuts are retrospective, starting from March 6. The studios can no longer exist, unless substantial cuts in pay are made, said the spokesman for the producers. The studios will remain open pending ac- < lion by the employees regarding the reductions. 1

EXPENDITURE REDUCTION

(Rec. March 9,2 p.m.) WASHINGTON, March 8

High Government officials, to-day, said that Air. Roosevelt, will ask Congress, this week, to grant him the widest authority possible under the Constitution, to effect immediate economies in government cost. The request will especially be directed at veterans' compensation. Under the President’s plan, it is stated that he would ask for authority to review all cases relating to veterans, and power to merge major departments, and cut the statutory appropriations.

LONDON ACTIVITIES

RUGBY, March S.

A better tone was revealed in the London financial markets. When the Stock Exchange opened, there was a

decided improvement in sentiment, operators taking a more favourable view of the United States situation. More interest was shown in South Africa mining shares, which showed a small general advance.

The purchase of gold amounting to £3,283,639, which is announced by the Bank of England, has raised the total inflow of gold into England since the beginning of the year to £4,117,991. Dealings in foreign exchange, meantime, are again permitted in all currencies, with the exception of the dollar.

On the Stock Exchange, British.. funds gained 1-8 to 9-16. War Loan £991.

CANADIAN QUOTATIONS.

MONTREAL, March 8. The Canadian dollar is soaring on foreign exchanges, according to interpretation by experts, placed on quotations in London, Paris and Montreal. The relationship of the pound and the French franc has remained steady in the past few days, but. the Canadian

dollar has increased its value against others. Sterling opened here to-day at four fourteen against Tuesday’s four-sixteen at the close, then slid to four-ten. The French franc, quoted at. four eighty over the week-end, has fallen to four seventy-one and a-half.

INTEREST UN-CHRISTIAN.

OTTAWA, March 8.

Declaring that all interest was unchristian and contrary to the Bible teaching, Mrs. J. J. Richardson has returned 83 dollars interest on Government bonds.