Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-10
HOOVER PROPOSALS
NEARING FRU|T|ON
AS WEEK CLOSES
Inquiry Is Begun to Aid Banks
at Crisis in Rail
Bonds.
INSTITUTIONS FACING
LOSS ON LIQUIDATION
Depreciation in Market Value
Threatens Standing on List Of
Eligible Investments.
BY the Associated Press.

BY the Associated Press
An economically spectacular week
ended today with part Of President
Hoover's business restoration program
nearing fruition and another Joint
! added to strengthen railroad securities:
Greatly encouraged over the senti-
; ment engendered by his proposals.
made public Tuesday night, for better
ing credit conditions, the Chief Execu-
tive Is making an exhaustive inquiry
into possible means of raising the In
Vestment value Of railroad bonds.
Banks Facing Losses.
Hundreds of savings banks and mu-
tual savings associations, particularly
IN the West have put money into these
bonds because OF decreased demands for
loans: Due TO declining value of the
securities, many of them are threatened
with being removed from the eligible
list for purchase by savings banks.
AT the same time, the depreciation In
their market value has placed the banks
in position of being unable TO dia.
pose OF their assets without loss.
Mr. Hoover has undertaken the ex-
panded inquiry with feeling that the
emergency $500. 200 credit CORPORA
ton which private bankers have or
gsnized will be far-reaching in its
power 70 restore normal processes of
credit and increase purchasing power.
He Is particularly impressed with the
support given his program by Senator
and Representatives who attended his
conference Tuesday and believes that
from the meeting evolved ms jor
legislative program.
1t was only . week ago that thu
President, after long discussions with
both administrative and private al
visers, decided to go forward with his
encompaSSing proposals. Since then.
day by day, events have followed
one another with = speed that has left
the financial world agape
Last Saturday night Mr.. Hoover sent
over the country his call for - Con-
gressional leaders to meet with him at
the White House on "a matter Of ma
tional importance"
Sunday night, scorning precedent he
visited the apartment of Secretary
Mellon to confer with prominent New
York bankers
Monday morning. In New York. the
bankers approved the program proposed
by the Chief Executive.
Parties Unanimous.
Tuesday night the proposals were
laid before leaders OF the legislative
oranch-a program Endorsed by the Fed
eral Reserve Board. the Federal Farm
Board and the Treasury Department
Sixteen Senators and sixteen Repre-
Sentatives Of parties of ordinarily diver
gent views were inspired to unanlmlty.
At midnight the President summoned
a Stenogra pher as the legislators left.
He dictated summary Of the program.
embracing:
Creation Of the $500. 200, 900 credit
corporation to help liquidate frozen as
sets of closed banks.
Liberalization of the stringent rediS-
count limitations prohibiting the Re-
serve Board from accepting certain
classes of securities.
Expansion of the Federal land bank
system and additional funds TO provide
extension of rural credits.
A planned conference with Premier
Laval of France to discuss possibility OF
extension of the one-year moratorium.
The appointment of working commit
tees of bankers to carry out the program
Of rediscount and dividend payments.
The possibility, II necessity required.
Of q recommendation to Congress OF the
crea ton of a finance corporation similar
in purpose to the War Finance Corpora
ton, with available funds sufficient for
any legitimate call in support OF credit"
On Wednesday, q market stimulated
some Tuesday by news that the con-
ference would be held, mounted In
creasingly. Congressional leaders made
public Endorsement of the program.
The American Bankers Association.
assembled in annual convention at At
lantic City. Fundamentally approved the
plan. Farm groups applauded 1t, par
ticularly the proposal to strengthen the
Federal Land Banks.
John w. Poole, controller Of the cur
rency, said he would recommend to Con-
greSs a plan to speed liquidation of
closed national banks.
Acts for Home Credits.
Wednesday afternoon the President
met with bankers, builders and real
estate men in a conference dedicated to
esta blishment of firmer foundation for
home building credit. This, however,
was looking toward the longer. and not
the emergency program, OF national
, progress.
Thursday. before the Pan-American
Commercial Conference, Mr.. Hoover
called for q cessation of international
loans except those devoted strictly to
productive enterprise.
Friday saw stronger markets obtain
ing despite profit-taking and the Presl-
dents inquiry into railroad bond values
| undertaken.
The White House also was informed
that the Executive Committee Of the
Chicago Clearing House Association had
voted unanimously to recommend that
! the organization participate in the
| $500, 200, 600 credit pool which New York
bankers expected to be operative within
| few days.