The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1931-10-15
TWO BILLIONFOR
GENERAL BUSINESS
si1
Ramiications of President
Hoover's Plans AreVery
Far Reaching
WORK TO BE DONE
Extra Session of Congress
Suggested to Make the
Plan Workable

Washington, DC. eEMocilization
of the entire financial structure of
the United States, private banking
and government, is under way to
swing business out of the ooldrums
it has been in for months and to
end the depression.
AS President Hoover's plans, pro-
muleated Tuesday, night at con-
ference with congressional leaders
of both parties, is revealed in all
its ramifications and wide-reaching
effect, it takes on considerably
more. significance and potentiality.
1t is, in reality, the mobilization of
a potential $4,000, 100000 to safe
guard the banks of the country, as
sist depositor in closed banks to Sc
cure quick dividends, provide capt.
tai for business and industry, other
wise start the wheels of business re-
yolving normally once more.
1t can be said that an extra ses-
sion is not entirely out of the pic
ture. The President still. is firm
in his determination not to call one,
but there are indications that he
may conclude to summon congress
some thine in November to expedite
matters.
Last Thursday it developed the
administration is consid- .ring the
formation of another revolving
fund, estimated at from 100 to 500
million dollars, to be administered
by the federal reserve system to as
sist insolvent banks. This is the
fund The Journal forecast in its
account of the administrations
plans for thawing out frozen as
sets, printed the week after Presi-
dent Hoover had taken it up with
the governors of the twelve reserve
districts. The object of the fund
is to expedite payment of deposit
ors in closed banks up to from 60
to 80 per cent of their total hold
ings.
The president vouchsafed the
following program:
A national banking institu-
ton, probably to be known as &
the National Credit Corpora
ton, with a revolving fund Of
s5OO,OOo,o 600 raised by private
bankers for the rediscounting
of intrinsically sound securities
not eligible under the federais }
reserve act.
A proposal to create federal :,
reserve fund of from 100 to 500 :
million dollars to facilitate and
expedite the liquidation of In
solvent banks.
An increase in the capital OF
federal land banks from go to Z
12o million dollars. Formation,
If necessary, Of federal agens =
s CIV akin to the old war finance
corporation. This corporation
would have a fund Of at least
$500, OOO, 900 minion dollars. all ;
provided by congress. 1t might
even go as high, IS 81, 900. 0Q0Oo0. :
On top of this, the President an
nounced he woufd ask congress to
liberalize the federal reserve redis-
count rules.
1t Is significant that there is more
talk than ever of forming feaeral
corporation patterned after the war
finance corporation. 1t has been
Suggested, again and again, during
the summer, and the fact that Pres
ident Hoover declared he would
urge it if the situation demanded,
has encouraged ana heartened its
advocates. 1t aiso Is Significant
that many within tine government
declare that such a corporation Will
be formed. SOM correspondents
boldly have written that the Presi-
dent will make such a move. but
SO far there is no basis for speaking
so definitely and finally about 1t.
AS a matter of fact, the carrying
into effect of one or all of the
major projects is contingent on the
success of>the national credit cor
poration, organization OF which has
been completed in New York. This
CORPORATION will reach into every
section of the country. have d.
rect hookup with every clearing
horse association in the United
States, and have on its directorate
a man from each of the twelve fed
eral reserve districts.
President Hoover and his finan-
cial advisers within the adInjnistra-
ton are confident this corporation
will meet the situation thoroughly
and effectively. As 1t is set up, It
is cheafly to benefit irtrinsically
sound banks that may need tenn
porary financial help or tiding over
some difficulty, but it is oeic that
it also can be used for purposes
of liquidating some of the insolvent
banks. For the most part. however,
Csvuy ~rxrrnr rranxrvsr