RECOVERY IN AMERICA

Waikato Times, Volume 116, Issue 19461, 28 December 1934, Page 4

RECOVERY IN AMERICA

The United States has, according to reports, just celebrated one of the most prosperous Christmas festivals for many years. P.rior to the advent of the holiday season, there had been noticeable signs of recovery, notably in financial matters. Some weeks ago the President gave a significant* hint that the Administration would be able to lay down the duties of a national pawnbroker, which it had undertaken in the financial emergency of 1933, and this hint has now been fulfilled.

President Roosevelt has now appointed a committee, headed hy the Secretary of the Treasury, to exercise a general control over the many public credit agencies previously set up, and this move is interpreted to mean that these agencies are nearing the end of their work and will presently wind up their separate existence and become absorbed in the supervising committee. The use of Government credit was.one of the most important, if not the most spectacular, expedients employed by the United States Government to meet the financial emergency of 1933.

With many banks closed altogether, many others in no position to lend, and an exceptional need for credit to meet obligations contracted against incomes which had suddenly vanished, the Government had either to stand by and watch the country go bankrupt piecemeal or itself to turn banker and advance as much as was needed to keep the wheels turning. The President naturally chose the latter course, using as channels for lending a number of organisations created for the purpose, such as the Agricultural Credit Corporation, the Home Oivners’ Loan Corporation, and the like* and also enlarging the work of the Reconstruction Finance Corporation, which had already been set up by President Hoover to assist banks and other industrial undertakings.

Now that the need for emergency credit has subsided and private bankers are able to cope with the current demand, the necessity for Government credit also diminishes. Already the Reconstruction Finance Corporation has announced that it will require no further funds to be authorised by Congress, and the Home Owners’ Loan Corporation is to receive no more applications for the relief of mortgagors.