Evening star., 1932-01-10
OWEN HOLDS QUICK MONEY
LOGICAL RELIEF MEASURE
Oklahoman Would Expand Currency
Until Hoarding Is Stopped and
Nation Receivers.

moved and we would be restored to
normal credit conditions in a reason
ably short time. This plan worked
SUCCESSFULLY in London on three occa-
sionS When the Barring Brothers failed
a great panic ensued in London. Hoard
ing took place. But this condition was
relieved in 48 hours when the British
ministry authorized the Bank of Eng
land to issue money against other Sc
curity than gold. This did not initiate
the currency because the money issued
for the moment was retired in few
weeks without any imitation of the cur
rency.
THE United States did the same
thing when the World War broke out,
when about S300,000,000 was sent to
New York of emergency currency au-
thorized by the Vreeland-Aldrich act.
This emergency currency was all re-
tired without the loss of dollar and
without any imitation Of our national
currency. Its effect was psychological;
it removed the fear which otherwise
would have caused boarding of cur
rency.
Provides Emergency Fund.
"The bill introduced in Congress on
January by Representative Kent E.
Keller of Illinois provides for an emer-
gency currency fund, issued against the
security of United States bonds up to
80 per cent of the par value, subject
to an interest charge of per cent and
compulsory retirement provision by
a penalty of forfeiture of the bonds
if the currency is not returned in IL
months.
"The emergency currency proposed
would be Treasury notes issued in the
same. denominations as the Treasury
notes now employed by the Federal
Reserve banks, and known as Federal
Reserve notes
Since all of the banks Of the country
have these bonds, the passage Of the
bill would give the banks and the coun-
try an immense sense of relief. The
banks would then realize that any
sudden demand for currency by their
depositors could be supplied Immediate
ly and without difficulty. 1t is i'm
possible to eXaggerate the Importance
Of this matter.
Effect Psychological.
"The effect of it would be largely
psychological. The probability is that
the issue of currency under this act
would be very small. When the people
realized that the banks could get all
the cash they might require, the fear
which now causes boarding would in
stantly cease and money would be
restored to normal circulation.
The value of commodities is deter
mined by the money in circulation, and
the moment that money began to cir
culate freely the commodity index
would begin to rise. Stock values would
follow and even anticipate the rising
value of commodities.
THE value of the Reconstruction
Finance Corporation IS itself largely
psychological, and the anticipated
passage of this bill has already stimu-
lated credit and the vaiue of securities
has begun to react even before the bill
passes.
There is no conflict between the
Keller bill (HR6704), or the Walsh bill
introduced in the Senate by Senator
Walsh of Massachusetts, and the
, Federal Reserve act, or the Reconstruc-
ton Finance Corporation. The Keller
Walsh bill supplements the Reconstruc-
tion Finance Corporation and would
make 1t much more effective, because
currency or money in circulation has
greater effect on commodity values
| than loans would have. The loans
would stimulate confidence, but avail
| able emergency money would be even
more effective, and the influence OF
both combined would Immediately end
/ basis of our trouble.
"On page 1924 of the Congressional
Record of Tuesday, last, will be found
this bill, introduced by Senator Walsh
| of Massachusetts,, together with ex-
planatory letters!
How Plan Would Work.
Nothing could be simpler than this
emergency currency bill. 1t would per-
NIT a bank, a corporation or citizen
to say to Uncle Sam:
IA few years ago, Uncle Sam,
loaned you $4,000 at 4 per cent on
| your bonds. I now ask you to lend
me $4,000 at per cent, with your
bonds as security. If I don't pay you
back in II months I agree to forfeit
the bonds
Certainly this is reasonable propo-
sition.
The value OF restoring credit condi-
! tions in the United States, and the
Importance Of it, will be realized when
it is observed that the income of the
United States in 1928 and 1929 av-
eraged about s90,000,O00,000 per an
mum and now it probably does not
| exceed 100000, 900 900 per annum. In
other words, If we could restore credit
conditions it would increase our ma
tional income about $4,000, 100000 an
nually. The deficit in our revenues
would cease, unemployment would be
restored to normal and our depression
would be ended.
"An immediate effect of the emer-
gency currency bill, if it should pass,
would be to bring the bonds OF the
! United States back to par.
obviously, the credit of the. United
States should be at par in order that
the Government may obtain the money
it requires at reasonable rate OF in
terest.
"The public interest would be served
by the passage of this act, as well as
the private interest OF the people.
This bill deserves the thoughtful con-
sideration of bankers, business men
and our statesmen"