The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-10-10
HOOVER MOVES
TO AID SHAKY
R. R. SITUATION
Decisions Are Being Held
Up, Pending Verdict in
Rate Increase Plea.
LOAN POOL IS LIKELY
Success of Bank Proposal
Is Seen Assured by
Chicago Action.
BY RAYMOND CLAPPER
United Press staff Correspondent

WASHINGTON, Oct. 1O.-The
next efforts to improve the domes-
tic business situation will deal with
the railroads, according to indica-
tions today.
Administration officials have been
considering the subject for several
days. Decisions are being held up
in expectation of the interstate
commerce commission action, ex-
pected within a week, on the pend
ing application of the railroads for
a Is per cent freight rate increase.
If the increase is granted, it may
reduce the heavy pressure for direct
action through some form of loan
pool.
The situation was canvassed
thoroughly at the meeting between
President Herbert Hoover and New
York bankers atethe apartment of
Andrew Mellon, secretary of treas
ury, last Sunday night, it has been
learned.
Sharp strengthening of railroad
securities in Wall Street the last
few days is attributed generally to a
feeling that aid soon will be ex-
tended.
Concerned With War Debts
More than $4,000, 100000 is out
standing in railroad securities. Rail
road bonds are held in large
quantities by savings banks and life
insurance companies, and I'M
warranted panicky selling has forced
prices far below intrinsic worth, &C
to many analysts.
Legal requirements are threaten
ing to force many institutions to
dump these bonds on the market at
a sacrifice unless relief is obtained.
Some indirect relief is anticipated
through the voluntary $500 900 900
bankers pool now being set up.
At the same time. Mr.. Hoover is
concerned with the difficult problem
of war debts, which are linked with
the domestic situation especially
through their effect on foreign
credits heavily held in America.
Because of the approaching visit
of Premier Pierre Laval of France.
President Hoover daily is turning
more and more thought to the
question.
Opposed to Cancellation
1t is complicated by the strong
congressional opposition registered
at the White House conference this
week. Mr.. Hoover, it was said
authoritatively today definitely is
opposed to cancellation and will be
guided by the debtors capacity to
pay.
Just how Mr.. Hoover intends to
translate this principle into definite
proposals when Laval arrives has
not been disclosed.
The vast financial program
launched here this week will have
direct effects reaching down to the
farmer and the workingman, in the
Presidents opinion. He regards it
not as an initiation measure, but one
OF Stemming the deflation.
Final assurance of success for the
plan was seen here Friday night in
indications that the Chicago Clear
ing House Association, thus far
hesitant, will participate in the
banking pool.
1t is believed skepticism on the
part of Chicago bankers was al
aged by New York bankers and the
White House. The Chicago asso-
citation will meet Tuesday to con-
slider the recommendation.
Hoover Holds Opposite View
There has been an undercurrent
If comment by some here that the
Hoover measures constituted a plan
o help only the bankers. Hoover.
however, holds the contrary view.
AS an instance, it was said that
seeking credit to turn
tut an order might have the mis-
ortune to be located in commun-
ty where the banking situation was
iiff1cult.
Credit, which would be extended
n normal times, might not be avail
Ible because heavy Withdrawals by
alarmed depositors
night have exhausted the banks
'eSourceS, save for securities which,
hough sound, we're not elegible for
at federal reserve banks. |
Under the Hoover program. the
'ank could turn to the new bankers
'ool now being set up and get
money. This money in turn would
'e loaned to the manufacturer.