Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-12
HOOVER AID PLAN
WAS TRIED IN WEST
FinanCier Recalls Success of
Expedient Employed in
1924 StringenCy.
BY ROGER BATCHELDER.

Special Dispatch to The Star.
NEW YORK, October l2.-The Hoo
yer plan for thawing credits and estab-
fishing securities with the aim Of pre-
venting senseless runs on solvent banks
is not entirely new in the Northwest
In that section of the country, as far
back as 1924 the plan on a smaller but
still considerable scale after a three
year fight was tried with eminent sue
cess.
The man who helped put the plan
over, F. Z. Murphy OF Minneapolis, now
in this city, outlined the form the plan
assumed in thc. section at the time,
adding, IF we could do it then, why
can't the rest c, the country, under
the leadership of the President do it
now? All we need is the confidence OF
the people in themselves
Origin of Plan.
When asked how he had come to es-
tablish the plan, Mr. Murphy said:
The trouble with the banks all over
the country today is simply magnifled
version of the trouble we were expert
riculture had Topped completely. The
farmers had been raising only grain
for Europe during the hoStilitieS and
the great demand for it naturally had
fallen OFT. Consequently there was no
sales of wheat ct the old prices, and
the growers had practically forgotten
how to raise hogs and other crops.
Even if they had remembered, there
wasn't enough liquid money in the
banks to permit loans for a change tc
hogs. Land values had fallen, farms
we're mortgaged to the limit and things
we're becoming desperate. There's the
background"
Ons day group of young men who had
just been graduated from agricultural
colleges called on Mr.. Murphy and said
they thought they could solve the prob
lem If they could get a little money to
solidify the banking situation. They
believed that if Congress would grant
loans of $4,000, the small banking in
situations might be able to hold their
depositorS and that loans might then
be made as in normal times.
Mr.. Murphy studied the plan care
fully and decided that 1t was feas-
ible one, despite the fact that North
western bank failures had been so con-
slant since the collapse of the grain
market that the entire economic syS-
tenn cf the farm States was threat
ened.
Mr.. Murphy went to Washington, ac-
companied by a delegation of 25, and
they battled for six weeks before the
House of Representatives voted the
money, but the Senate turned the re-
quest down.
Eastern Bankers Help.
In the meantime. cash was being
drawn from savings banks and put into
socks and tin boxes in the grain areas.
At the climax, one bank a day was
falling.
TT looked to me like prairie fire"
said Mr.. Murphy.
But he was undismayed. He found
Eastern bankers were ready to help
the Northwest, but when he reported
back home the local bankers laughed at
The idea. No one thought that the
sum of $l0,00O,000. thought to be nee
essary, could be raised
But the work of Mr.. Murphy and
his associates was not in vain. Power
full friends came to their aid-Presi-
dent Coolidge, the then Secretary of
Commerce Hoover and others.
The Agricultural Credit Corporation
of Minneapolis came into being, and it
was announced that S10,0o0,000 had
which would be backed by S100.000,000
additional credit assured by the War
Finance Corporation.
I'VE financed the purchase of live
stock and put one man after another
on his feet. The whole tone OF the
section was improved, and there came
a complete change, with only small
part of the Sl000o000 necessary to
bring that about