Evening star., 1931-12-08
Text of President Hoovers Message to Congress

IL ~ LV
that an emergency reconstruction
corporation of the nature of the
former War Finance Corporation
should be established. 1t may not be
necessary to use such an instrument
tality very extensively. The very
existence of such a bulwark will
strengthen confidence. The Treas
ury should be authorized to subscribe
a reasonable capital to it, and it
should be given authority to issue
its own debentureS. 1t should be
placed in liquidation at the end of
two years. Its purpose is that by
strengthening the weak spots to thus
liberate the full strength of the Ma
tion'S resources. 1t should be in DO
sition to facilitate exports by Ameri-
can agencies; make advances to ag-
Ticultural credit agencies where nee
eSsary to protect and aid the agri-
cultural industry; to make tempo
rary advances upon proper securities
to establish industries, railways and
financial institutions which cannot
otherwise secure credit, and where
such advances will protect the credit
I.
Its functions would not overlap those
of the National Credit Corporation.
Federal Reserve
Eligibility.
On October 9Th issued state
ment that I should recommend to
the Congress an extension during
emergencies of the Eligibility pro-
visions in the Federal Reserve act.
This statement vas approved by a
representative gathering of the mem
berS OF both Houses of the Congress,
including members of the appro-
pirate committees. 1t was approved
by the officials of the Treasury De-
partment, and l understand such an
extension has been approved by a
majority of the governors of the
Federal Reserve banks. Nothing
should be done which would lower
the safeguards of the system.
The establishment of the mortgage
discount banks herein referred to
Will also contribute to further re-
serve strength in the banks without
imitation.
Banking
Laws.
Our people have a right to a bank
Ing system in which their deposits
shall be safeguarded and the flow of
credit less subject to storms. The
need of sounder system is plainly
shown by the extent of bank failures.
l recommend the prompt improve
ment Of the banking laws. Changed
financial conditions and commercial
practices must be met. The Congress
should investigate the need for sepa-
ration between different kinds of
banking; an enlargement of branch
banking under proper restrictions,
and the methods by which enlarged
membership in the Federal Reserve
System may be brought about.
Postal Savings
Banks.
The Postal Savings deposits have
increased from about 5000, 100000 to
about $550,000,000 during the past
year. This experience has raised
important practical questions in re-
lation to desposits and investments
which should receive the attention
of the Congress.
Railways.
The railways present one Of our
immediate and pressing problems.
They are and must remain the back
bone of our transportation system
Their prosperity is interrelated with
the prosperity of all industries.
Their fundamental service in trans
portation, the volume of their EN-
ployment, their buying power for
supplies from other industries. the
enormous investment in their Sc
curities, particularly their bonds, by
insurance companies savings banks,
benevolent and other trusts, all re-
fleet their partnership In the whole
economic fabric Through these
institutions the railway bonds are in
large sense the investment of every
family. The well maintained and
successful operation and the sta
bility Of railway finances are of pri-
mary Importance to economic re-
covery. They should have more eff
fective opportunity to reduce oper-
ating costs by proper consolidation.
As their rates must be regulated in
public interest, SO also approximate
regulation should be applied to COM
peting services by some authority.
The methods of their regulation
should be revised. The Interstate
Commerce Commission has made
important and reaching recon-
mendations upon the whole subject,
which / commend to the early con-
sideration Of the Congress.
Anti Trust
Laws.
In my message of a year ago I
commented on the necessity of con-
gressional inquiry into the economic
action of the antitrust laws. There
Is wide conviction that some change
should be made, especially in the
procedure under these laws. I do
not favor their repeal. Such action
would open wide the door to price
flx1ng, monopoly and destruction of
healthy competition. Particular at
tention should be given to the in
dustries founded upon natural re-
sources, especially where destructive
competition produces great wastes
OF these resources and brings great
hardships upon operators, employees
ana the public. In recent years
there has been continued demorali-
Zatlon in the bituminous coal, oil
ana lumber industries. again
commend the matter to the con-
sideration Of the Congress.
Unemployment.
AS an aid to unemployment the
Federal Government is engaged In
the greatest program of public build
ing, harbor, flood control. highway,
waterway. aviation. merchant and
naval ship construction in all his
tory. Our expenditures on these
works during this calendar year will
reach about $780,000, 900, compared
with $260,000,000 in 1928. Through
TINS increased construction, through
the maintenance of a full compile
ment OF Federal employees and
through services to veterans it is
estimated that the Federal taxpayer
is now directly contributing to the
livelihood of 100000 of our citi-
zenS.