PRESIDENT’S DICTATION

Taranaki Daily News, 11 March 1933, Page 5

PRESIDENT’S DICTATION

HUMBLE ACCEPTANCE BY CONGRESS SWEEPING CHANGES IN BANKING ROOSEVELT’S REMEDIES IN CRISIS By Telegraph-Press Assn.-Copyright. Received 7.50 p.m. New York, March 9. BEHIND the outward drama of an extraordinarily humble Congress to-day accepting without quibble or remonstrance sweeping dictation from President Roosevelt for a drastic change in the banking and finance systems was the even greater drama of the capitulation 1 of the once strongest forces in American economic life—the great conservative bankers and financiers—and the general acceptance and approval of a new philosophy. This philosophy in the simplest terms may be indicated as important concessions to the great debtor classes of America. Not only almost universally did the Press approve the new Banking Bill, which within ten hours from its introduction obtained the consent of both Houses, but Mr. Herbert Hoover himself, who had been supported for re-election by the chief banking figures of the country against Mr. Roosevelt, approved of the measure in a statement to-night. Moreover, behind the statement of Mr. Aldrich, a leading banker, asking for the divorcement of flotation banking from commercial banking is seen acceptance by Mr. Roosevelt and the so-called priests of conservative banking, of the cult of the once cordially hated “progressive liberalism” in matters financial.

RECORD In legislation

EMERGENCY BILL SIGNED REVIVING SOUND BANKS POWERS OF THE PRESIDENT Rec. 10 p.m. Washington, March 9. President Roosevelt’s signature on Thursday night made law the Emergency Ranking Bill, providing for expansion of the United States currency and empowering him to reopen sound banks. Mr. Roosevelt signed the measure hardly more than an hour after the final formalities of Congressional approval had been finished. The House passed the Bill unanimously and the Senate, by 73 votes to seven. The speed at which the Bill was rushed through Congress and signed is believed to set a record. Immediately after the signing Mr. Roosevelt, the Secretary of the Treasury, Mr. Woodin,, and the Attorney-General, Mr. Cummings, conferred on questions of administration. It is understood about 4000 or 5000 banks will receive an immediate "0.k.” from the Government as sound institutions and that they will open soon. The President called a conference tonight of the leaders of both parties. in Congress, it is believed in connection with emergency action to balance the Budget preparatory to submitting additional emergency legislation in another special message on Friday. A constitutional amendment giving Congress authority to levy a direct capital tax to decentralise wealth was proposed on Thursday by the Democrat Senator for Louisiana in a resolution introduced in the Senate. Mr. Roosevelt is extending the bank holiday indefinitely. He has prepared a proclamation continuing the gold embargo to protect the United States against foreign traders; otherwise the new law gives the President full power to carry on almost as a dictator over the banking, institutions of the country. GREATEST UNCERTAINTY. To-night there is still the greatest uncertainty whether to-morrow the banks, will open or what they will do, or as to. what degree the general community can hope to find itself returned to that degree of financial normality it. so long has desired. The details of the deep changes contemplated are too vast and complex Family to effect, but the significance of the occasion is inescapable. America has finally been launched upon the stream of inflation. Only time will tell whether the dire warnings by the “money overlords,” as the Wall Street bankers have been dubbed, that the sound money era is over are justified or ' whether “easy money,” as it is being called, represents only a salutary “reflation” rescuing the debtor classes, revivifying business and rehabilitating commodity values, which until now seemed to be faced with utter extinction. If foreign. observers see the drama in America as a conflict of classes or of sections with the large agrarian areas in the south and west wresting control of the nation’s economic affairs from the financial and industrial east and north it will perhaps be difficult to gainsay this impression.

Mr. Sirovich, a member of the House of Representatives, has prepared for introduction to Congress a joint resolution giving the President power to conscript the financial resources of virtually all the financial institutions, including corporations, banks, life insurance companies and railways. It is asked in some quarters whether Mr. Roosevelt has not already begun to do so in his “new deal.” Mr. Roosevelt’s pre-election slogan at last has a concise meaning to. Americans as a whole. The radical weekly magazine Nation to-night issues a news bill, “System ends; devaluate now.” An interesting aspect of the developments concerns the gold situation. The demand that gold hoarders return the metal resulted in the return of 50,000,000 dollars to the Federal Reserve system in the last two days, with the hoarders all anxious to suppress publication of their names and prosecution which had been threatened. It has been disclosed that probably 750,000,000 dollars in gold was gradually absorbed by domestic hoarders during the past two years, offering an interesting opportunity for comment upon those American financial experts who in articles discussing the gold question called India a "sink” for gold and who blamed also the French peasants for buying large quantities of American gold coins since French gold coins were not available for putting in socks. A more serious question with the promulgation to-night of the indefinite continuance of the gold embargo is what position the dollar will assume on foreign exchanges. The best opinion appears to agree with the British comment cabled from London that there will not be a serious decline in the price of the dollar against foreign currencies,' and that any possible “raid” against the dollar from abroad is not likely to meet with much success. It stressed as significant that the United States still retains immense gold stocks. IMMENSE POWERS. That the powers given the President under the Emergency Banking Bill are not only immense but t that this first measure of his administration already contains the instrumentality for basic reform of the American banking system Which he was not expected to secure so quickly can be seen from' the Provision in the measure that he will limit the reopening of the banks only to sound institutions. Senator Long, whose amendment that the president’s powers to safeguard the banks be extended to State banks also was voted down, indicated not only the weakness in the American banking system but also a comprehension of the vastness, of the power given the President. Mr. Long cried: “Unless the State banks of Louisiana are included it will be a dark day for my State.” It seems to be indicated that banks whose reserve capital is dangerously depleted will be placed in the hands of a so-called conservator and liquidated in the interests of the depositors and the institutions themselves eliminated. It was indicated to-night that not alone on the banks will Mr. Roosevelt ask Congress for exceptionally broad powers. Very shortly, apart from slashing economies in Governmental expenditures and the rehabilitation of the railways under a single transport management, he will ask for an immediate appropriation of 500,000,000 dollars for Federal unemployment relief work. The relief agency estimates that 12,500,000 persons are at present unemployed in the country.