AMERICA’S PRODLEMS

Waihi Daily Telegraph, Volume XXX, Issue 8493, 25 July 1933, Page 3

AMERICA’S PRODLEMS

EFFORTS TO IMPROVE INDUSTRIAL CONDITIONS EXPANSION OF CREDIT WASHINGTON, May 31. Acceleration of industrial and trade recovery, particularly by means of the expansion of credit, is described as having the undivided attention of President Roosevelt. The Federal Reserve Banks have begun large-scale purchases of Government obligations, tho result of which is to increase tire volume of funds at the disposal of the member banks for loans to industry. Whether this move will prove successful remains to be seen. It failed last year, although the reserve banks purchased more than 1,000,000,000 dollars’ worth of Government securities. Either 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 he financed. Mr Roosevelt purposes to accelerate business activity tremendously within a few weekks by moans of IBs 3,300,n 0 0,000 dollars public works programme. To finance this Government hands will bo issued.

The President is confident that the Government can control any extensive currency inflation.

Meanwhile, there is a minority party in Washington Joarlul ot the President’s huge experiments. One authority estimates that 3 0 per cent, of the American people are with Mr Roosevelt, oven in his most radical experiments, and probably the country can stand the shock of the failure of one or more of them more easily than it could stand " the fatal inactivity that marked the Administration before Mr Roosevelt’s arrival on the scene.