Evening star., 1932-02-12
Everybody's
Business
Marked Changes for Better
IN Economic and Financial
Status of Country Seen in
Revised Bank Bill.
BY DIR. MAX WINKLER.

In its revised form, the DanK Dill
evolved by United States Senator Car
ter Glass Is generally viewed as con-
structive. The Senator from Virginia
and all or, at least, most OF those VINO
are responsible for the project, ex-
pect very marked changes for the bet
ter in the economic and financial
status of the country. They anticipate
| that the bill, if passed, will bring out
Of hiding boarded money and afford
protection against raids from abroad
against American reserves.
These hopes are based upon the pro-
vision in the bill which will make 1t
possible for member banks to obtain
from the Federal Reserve Banks ao-
vances which are not now technlcally
eligible for rediscount. Such advances
may be obtained under proper safe
guards, either on Endorsement of other
member banks, or, In unusual cases,
without Endorsement.
In other words, institutions which do
not possess eligible paper, but which
have other sound and adequate secur-
ity, will be in a position to take care
of whatever requirements their Gus
toners may make upon them; while
banks which have no immediate use OF
the above provisions by reason OF their
existence will not hesitate to extend
financial accommodation to their
clients.
1t is rather apparent that measures
of this character will tend to put stop
to the continuance of bank failures,
which have been one Of the principal
causes Of the drastic liquidation in the
securities and commodities markets.
They will also make possible credit ex-
pansion. thereby facilitating improve
ment in business throughout the coun-
try.
Another feature of the bill is the en-
ployment as a basis for credit OF the
large supply of gold of Federal Reserve
System in excess of the 40 per cent pro-
vided by law. That is to say, certain
of the assets acquired by the reserve
banks and comprising mainly United
States Government issues will be avail
able for not more than one year as col
| lateral for Federal Reserve notes, in
addition to the 40 per cent cover
In this way. the Reserve Systems
| free gold will at once increase by some
thing like $3.50 000, 900, which possibly
may set at rest rumors circulating
abroad in regard to the possibility of
the United States abandoning the gold
standard, and to which may be at
tributed the inceSsant Withdrawals Of
the yellow metal for European account.
The greater flexibility which the pro-
posed bill is expected to give to the op-
erationS of the Federal Reserve, may
conceivably result in a rather marked
expansion in the nations business In
this connection. plans devised by Henry
Ford are worthy Of careful considera-
| ton. TIE world of commerce and in
dustry has been startled more than
once by the dean of Americas indus
trial monarchS. Mr.. Ford's views on
business are often revolutionary IN
character. They do net, as a rule. fail
to have profound effect upon
economic conditions in the country.
| Thanks to the ramiflcations Of the Ford
enterprises in all parts of the world.
whatever move may be undertaken by
the Detroit wizard is felt equally keenly
beyond the confines of the United
States.
| Business is admittedly at low ebb.
1t has been that way for nearly two
and a half years. Many measures have
! been proposed to bring about change.
| Plans have been submitted to Washing
| ton. outlining program which would
| make fer a speedy recovery. All Ce-
vices were purely theoretical. Nothing
concrete was undertaken. Miracles
were expected to happen.
! In the midst of the prevailing uncer-
| Id1nty, carter Glass ana henry fOTQ
! come to the rescue. Mr.. Glass plan
! has been discussed. AS to Mr.. Ford.
| he is building on a rapidly increasing
scale and will soon be offering new
model, at the lowest cost ever known,
| to the greatest number of buyers. The
marked increase in output may very
| conceivably set the wheels Of industry
! going. Production at the vast Ford
enterprises will require increasing
amounts Of raw materials and various
other items which go into the manu-
| facture Of the new Ford product.
The crux of the situation lies, how
| ever in the creation or, rather, the re-
viva. of market for the new car. To
this all-important question, the Detroit
manufacturer supplies what may be
considered a thoroughly honest answer.
He is aware of the existing difficulties
which the nation faces. He realizes
| that events in the past two and a half
years have reduced appreciably the pur-
chasing power of the people. He also
knows that in order to purchase what
are not strictly speaking necessities Of
| life. some extraordinary inducement
will have to be offered. This induce
ment. Mr.. Ford maintains, consists Of
/ meeting the public demand by giving
it something new and better at price
which the average man can afford.
| (Copyright. 1882. by the North American
Newspaper Alliance, 1ncD
|