Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-10
Everybody's
Business
Hoover Plan Regarded More
Likely to Stimulate Bus'-
ness Revival Than Money
Rates Kept Lou by Art'-
fetal Means.
BY DR.. MAX wINKLER.

NEW YORK, October 10.-Low
money rates are not synonymous with
easy money. This has been the situa-
ton in the United States as regards
monetary conditions.
Despite the fact that the rediscount
rate of IL per cent had been the low
est on record, accommodations for bust
ness and finance were not readily oo-
tainable. Consequently, the low rate
had, for all practical purposes, only lit
vac The he proposed $500, ooo, 900 institution
embodied in the Hoover plan, is re-
oarded bv credit authorities as more
likely to stimulate financial and buSl-
ness revival than money rates Whlch
are kept low by artificial means. For
these reasons, an advance OF per cent
in the rate should tend to improve the
level of bank earning power, partlcu-
larly In the larger centers where lnstl-
buttons hold relatively large amounts OF
bills and other paper.
Delay Is Dangerous.
In order to produce the salutary ell
fects which business and finance eX-
pect as a result of the Hoover plan, II
Is essential that 1t be put into opera
ton forthwith. Delay is dangerous.
This is borne out by reports OF FUR
Their bank failures which, as has peen
stated so often, constitutes one OF Lne
most serious problems facing the Ma
ton. Several institutions have just
been ordered closed. To be sure. most
of them are small, with the possible
exception of one bank of Philadelphia,
with deposits of about $7,500,0oo, and
one in Detroit, which held more than
Sc, 100000 deposits, and which was
headed by Mrs. Matilda r. Wilson,
elected chairman only recently.
However, the hardships upon the
community as a result OF the failure
of small institution are often greater
than those which result from the clos
ing Of a relatively larger establish
ment. One of the main purposes OF
the Hoover plan Is to put stop to the
continuance of bank failures. In or
der that the public may not lose con-
fldence in the highly constructive char
acter of the plan. 1t is necessary to
put it to work at once. There are good
reasons for believing that this will be
done.
Plan Should Succeed.
Following the great war, Sir George
Paish, prominent British economist,
conceived a plan to effect a speedy re-
Mobilization of war-torn world. the
project, which related to the creation
of a bank with a capitalization OF
81 900 900, 900, died before it was even
born.
The reason for this does not neces-
sarily lie in the fact that the plan was
not sound. National antagonists and
racial animosities were still too pro-
nounced to permit OF any constructive
measure being put through. Sir George
endeavored to save the world from the
effects Of war.
President Hoover is endeavoring to
save it from the effects of peace imme-
diately following a war. The Difficult
ties experienced everywhere through
out the past two years are doubtless
directly traceable to the cataclysm
which commenced with the shooting OF
an Austrian archduke in the streets OF
AS a result of the Presidents recon-
mendations, there will be incorporated
an institution for the purpose OF aid
inc banks throughout the United States
to utilize their resources and credit 50
as to further the sterilization OF imam
cial and economic conditions, and to
enable them better to serve their re-
spective communities. The scheme has
merit and the support of business and
finance There is no reason why 1t
should not succeed.
Swayne Sees Prosperity.
Improvement in general business
conditions will begin in 1882 and lead
to the restoration of prosperity largely
as a result of the recently proposed
Hoover plan, according to Alfred H:
Swayne, vice president Of the General
Motors Corporation.
Mr.. Swayne is also of the opinion thai
the outlook for the motor industry maY
be regarded as promising, even though
at the moment business Is somewhat
depressed. Sales of General MotoEs:
both domestic and foreign, have shown
an appreciable shrinkage for the month
of September. This Is particularly
true of the foreign business which, for
the past, month, shows a decline of
over % per cent as compared with Sep
TENDER, 1880, and one of more than 80
per cent as compared with August of
this year
The relatively larger shrinkage in for
eign sales may be attributed to iuncer-
tainttes in connection with foreign ex-