Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-07
Rallying Constructive Forces.

Rallying Constructive Forces.
President Herbert Hoover has pre-
scented a carefully prepared and at the
same time bold plan for unified action
to preserve the banks and restore con-
fidence throughout the country. HIS
plan calls both for action by the bank
ers themselves and for legislation by
the Federal Congress. Today, with the
concurrence in his proposals OF bank
ers and congressional leaders, the pros
pect of translating the plan into action
appears bright in the extreme.
Lack of confidence, brought about
by continued assaults during the last
two wears upon the securities markets
and upon American financial mStltu-
tions. has spread until valuable assets
running into the hundreds OF millions
of dollars, held by banking houses
throughout the country, have become
frozen" As President Hoover has
pointed out, destructive forces nave
been at work, and at time when De-
cause of world conditions the field has
been open to them. The need Is Tor
marshaling of constructive forces, Tor
a unified front within this country. Inc
President has assumed leadership In the
effort to bring about such marshallng
of constructive forces. The fight against
depression and its consequent unem-
ployment and want is neither Repub-
lican nor Democratic. 1t Is non-paru-
san. The President is acting not as the
head of the Republican party in this
matter, but as the President OF the
United States. His hands should be up
held.
The President at a meeting with
thirty-two members of Congress last
night laid down the specific proposals
he has worked out after many confer
ences with leading financiers, with rep
resentatives of many other groups and
with his own official advisers. He
proposes that the banks themselves
with their huge resources set up and
administer a revolving fund OF $780,
$1,000 for the purpose of rediscount-
ing banking assets not eligible Tor re-
discount under the Federal Reserve
system, "in order to assure our banks,
being sound, that they may attain liqui-
dity In case of necessity and thereby en-
able them to continue their business
without the restriction of credits or
the sacrifice of their assets" The
President made it known also that he
has called upon the governors OF the
Federal Reserve banks to obtain the
cooperation of the member banks in
their districts to make some advances
on the assets of closed banks, so that
business organizations and individuals,
harnfully affected by the closing OF the
banks, might have relief as soon as
possible.
Three legislative proposals advanced
by the President call for liberalization
of the eligibility of paper for redis-
count under the Federal Reserve Sys-
TEN; the furnishing Of additional capt.
tai by the Government to Federal land
banks, and the setting up, if necessary,
of an organization similar to the War
Finance Corporation to reinforce the
-billion-dollar revolving fund OF
banks.
The Presidents plan, if it is earnest
" supported by the bankers and car
ried out in it's legislative details by
Congress. will have far-reaching effects.
It should be a powerful factor in the
renewal of confidence sadly needed In
this country. This lack Of confidence
has been demonstrated in many ways,
but no more strikingly than in the
withdrawal of approximately $8OO,OO0,-
600 of currency from commercial ac-
Invites and its hording by its owners.
The return of such vast sum to the
banks and to commercial uses would
be of great value.
The President realizes, as does the
rest of the country, that the solution OF
the present depression in the United
States is bound up in measure with
the worldwide economic problem. AT
his conference with the members of
Congress last night, Mr.. Hoover made
known his intention of discussing with
Premier Laval of France the question
of such further arrangements as are
necessary during the period Of depres-
sion respecting the payment of inter-
governmental obligations. He did not
ask the approval by the legislators of
this course, believing that it is matter
Of international negotiation in the first
instance 1t has been obvious for some
time that if the depression which has
gripped Europe is not lightened within
the period of the years moratorium al
ready arranged under the leadership Of
the United States, further steps may be
imperative in connection with the in
tergovernmental debts. The country
will watch with interest the course
which Mr.. Hoovers discussions with
the French prime minister will take.
Glasgow is prepared to remind the