BANKS CONTROL

Taranaki Daily News, 11 March 1933, Page 5

BANKS CONTROL

AMERICAN LEGISLATION EXPANSION OF CURRENCY SOUND FIRMS PROTECTED EVOLUTION OF NEW BASIS UNEMPLOYMENT RELIEF By Telegraph—Press Assn.— Copyright. Washington, March 9. “To review at this time the causes of the failure of our banking system is unnecessary/* said President Roosevelt in a 500-word message to-day. “It is sufficient to say that the Government has been compelled to step in for the protection of depositors and the business of the nation, . “Our first , task is to reopen all the sound banks. This is an essential preliminary to subsequent legislation directed against speculation with the funds of depositors and other violations of a position of trust. , . f “In order that the first objective of opening the'banks for the resumption of business may be accomplished, I aric Congress for the immediate enactment of legislation giving to an executive branch of the government control over the banks for the protection of depositors and authority forthwith to open such hanks as have already been ascertained to be in a sound position, and other banks as rapidly as possible, and authority to reorganise and open such banks as may be found to require reorganisation to put them qn a sound basis. “I ask for amendments to the Federal Reserve Act to provide for such additional currency, adequately, secured, as it may become necessary to issue to meet air the demands for currency, and at the same time achieve this without increasing the unsecured indebtedness of the Government of the United States.

ECONOMY AND EMPLOYMENT.

Mr. Roosevelt will also request of Congress at an early moment two 1 , other measures he regards of immediate urgency. It is understood these refer to granting him power to cut Federal expenses drastically and getting to work on a huge building programme to provide employment. “It is my belief,” the President said, “that this banking legislation will not only lift immediately all unwarranted doubts and suspicions in regard to the banks which are 100 per cent, sound, but will also mark the beginning of a new relationship between the banks and people of this country.” Talk of a dictator for Wall Street is being heard. He would be a referee. to adjust delicate operations and foreign exchange transactions. Since the beginning of. the week approximately 35,000,000 in gold and gold certificates have flowed back into the Federal Reserve Bank at New York from member banks and individual hoarders. The currency expansion contemplated, well-informed authorities state, would not result in any debasement of currency whatever, nor operate through a reductioii in the gold content of the dollar, which would not be printing press money” in any sense, said one authority. Montreal reports that the Canadian dollar leaped upward again to-day. The French franc, a gold basis currency, and used as a criterion in the absence of quotations of the American dollar, was down to 4.69 cents as against Wednesday’s 4.72 cents. The pound was steady at 4.13 dollars. The continued rise of the Canadian dollar has furnished financial experts with further evidence of the demand for dollar credits in Europe to pay for Canadian exports. Exporters who were asked for price quotations on goods to terms of the Canadian dollar formerly quoted through the medium of the pound or the American dollar. HOUSE PASSES MEASURE UONTRODDED CURRENCY EFFECT OF LEGISLATION Washington, March 9. The House of Representatives to-day passed President Roosevelt’s Banking Bill, which embodies his programme for a controlled expansion of currency and resumption of normal banking under his regulations. It will ratify the executive orders issued by the President and continue hi? authority over the banking situation, will provide for the concentration of the United States gold supply in the Federal Reserve banks, penalise hoarding, provide for the controlled expansion of currency, authorise reorganisation under careful safeguards, and provide for a period of segregation of new deposits in banks of a certain class. The new deposits so segregated are to be subject to withdrawals as the comptroller may permit. The Bill will permit banks to secure circulating notes from the Federal Reserve system. . In return for the United States’ obligations in notes, drafts, bills of exchange and bankers’ acceptances, notes will be given banks to the full value of the United States, obligations and 90 per cent, of the sound value of the notes, drafts, bills of exchange and bankers’ acceptances,. The Senate will send the Bill to the President on Thursday. . BIG CUT.IN EXPENDITURE UNEMPLOYMENT RELIEF PLAN. REAFFORESTATION PROGRAMME. Rec. 10 p.m. Washington, March 9. Mr. Roosevelt presented to Congress leaders on Thursday night a Bill calling for a 500,000,000 dollar cut in Federal expenditures to be made largely .in veterans’ appropriations and in salaries. A member bf the conference said Mr. Roosevelt’s plan will embrace a proposed 500,000,000 dollar bond issue to create forestry crops to put in motion . a reafforestation programme providing for the employment of 500,000 persons. Mr. William Greene, president of the American Federation of Labour, said on Thursday night that unemployment rose to the peak of 12,700,000 in January and probably went higher afterwards. The increase for January over a year ago was estimated at 2,400,000. He said the bank crisis unquestionably, would increase unemployment. “Business cannot recover until these unemployed go back to work by hundreds of thousands,” he added. •