Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-07
BY the Associated Press.

by JUC hSSOCldteu EItoos
The text of the statement made by
President Hoover early this morning
follows:
THE prolcngation of the depression
by the succession of events In Europe,
affecting as they have both commodity
and security prices, has produced In
some localities in the United States an
apprehension wholly unjustifled in view
of the thousand-fcld resources we have
for meeting any demand.
Foolish alarm in these sections has
been accompanied by wholly unjustifl-
able withdrawal of currency from the
banks
Such action results in limiting the
ability Of the banks in these localities
to extend credit to business men and
farmers for the normal conduct OF bust
ness, but beyond this to be prepared
to meet the possibility OF unreasoning
demands of depositors the banks are
compelled to place their assets in liquid
form by sales of securities and restric-
ton of credits so as to enable them to
meet unnecessary and unjustifled
drains. This affects the conduct Of
banking further afleld.
Business Hard Hit.
1T is unnecessary to specify the I'M
fortunate consequences of such, Sltu-
alton in the districts affected both in
its further effect on national prices OF
agricultural products, upon securities
and upon the normal conduct of bust
ness and employment OF labor.
1t is a defiationary factor and q
definite impeachment TO agricultural and
business recovery.
There is no justification for any
ffnh In KTfA - hn ct NNGyf
of our banking system, and the strong
position of our Federal Reserve system
Our dif1cultv is a diffusion of re-
sources and the primary need is to
mobilize them in such way as to re-
store in a number OF localities the
confidence of the banker in his ability
to continue normal business and to
dispel any conceivable doubt in the
mind OF those who do business with
him.
Outlines Program.
I'm order TO deal with this wholly
abnormal situation and to bring about
an early restoration of confidence, unity
of action on the part of our bankers
and cooperative action on the part OF
the Government is essential. There
fore, l propose the following definite
program Of action, to which l ask our
| citizens to give their full cooperation:
81 To mobilize the banking resources
of the country to meet these conditions
l request the bankers of the Nation tc
form a national institution of at least
| $500, 600, 900. The purpose OF this insti-
tuition to be the rediscount Of banking
assets not now eligible for rediscount al
| the Federal Reserve banks in order &c
assure our banks, being sound. that they
may attain liquidity in case OF necessity
and thereby enable them TO continue
their business without the restriction OF
credits or the sacrifice of their assets.
Il have submitted my proposal to the
| leading bankers of New York.
| Il have been advised by them that il
will receive their support. and that Al
| my request they will assume the leader
ship in the formation Of such an or
gani5ation. The members OF the New
York City Clearing House Association
have unanimously agreed to contribute
their share by pledging $l50000, 900
which is per cent Of their net demand
and time deposits.
Assured of Support.
II have been assured from other large
centers, as far as I have been able tc
reach. of their support also. l consider
that it is in the national interest. in.
Guiding the interest of all individual
banks and depoSitorS. that all the banks
of the country should support this move
ment to their full responsibility.
! 1T Is a movement Of national assur-
ance and of unity of action in an Amer.
lean way to assist business, employment
| and agriculture.
20. On September 8 requested the
governors of the Federal Reserve Bank: