Evening star., 1932-02-11
Everybody's
Business
Bull Of Hoard;ng Revealed
a, Among Glass of Amer
;;can Psob1e Above Aver
age Means.
BY DIR. MAX WINKLER,

NEW YORK, February II (NANA).
AS part of the campaign to induce
the withdrawal Of currency from hoard
ing places and putting 1t into the legiti-
mate channels of commerce and indus
try, the Reconstruction Finance Corpo-
ration Is understood to consider the sale
of debentures to the public in small
denominations.
While statistics on this point are not
available, II would be interesting to
know to what extent the average per-
son-that is, the one with restricted
means-has resorted to boarding. One
has good reasons to suspect that hoard
ing is being practlced on a rather ex-
tensive scale by what may be called
people of more than average means.
II this Is true. it may not be very
practicable to attempt to obtain the
small investors money through the sale
to him of bonds with small denomi-
nations.
While the administration is doing its
utmost to restore confidence stop hoard
ing and reassure the public as to the
inherent soundness OF conditions, fall
ure of financial institutions continues
u.
pended last week, as compared with so
in the preceding week. To be sure, the
banks involved are small but this does
not in any way diminish the serious
consequences resulting from closings.
If the Reconstruction Finance Cor
poration could see its way to stating
in definite, unambiguous terms that pro-
lection would be afforded to depositors,
II would accomplish more than II does
by theorizing. The country has had
enough of theorizing Something Of
more tangible nature is needed and II
should be forthcoming without delay.
The campaign to stop the boarding
of currency is not going to be one OF
beautiful phrases and blue-sky stuff.
according to Franklin Knox, head of
the Presidents Committee to Stop
Hoarding. An attempt will be made.
the colonel maintains, to educate people
to put deposits in banks so as to expand
the credit fabric Of the country.
Might it not be desirable to have such
a campaign preceded or at least accom-
panied by assurances that the peoples
deposits would be afforded 100 per cent
protection?
It is announced that policy OF 81
lence is to be pursued by the Recon-
struction Finance Corporation. No news
statements are TO be given out in regard
to loans applied for and granted.
It is somewhat difficult TO subscribe
unoualifiedly to this theory. Frank dis
cussioas of the various phases OF the
corporations work would be helpful
rather than an impediment to the con-
structive program of the enterprise.
What is actually needed above all Is the
creation of more cheerful nnanclai
atmosphere, which would stop hoaroing,
increase buying and reduce and even
tually eliminate runs ON banks ana
other financial institutions.
Despite the soundness of certain in
oividual provisions of the banking Dill
evolved by United States Senator Carter
Glass, the project as whole ooeS not
appear to be sufficiently constructive TO
warrant its unqualified indorsement oy
business and finance. The features
which would appear especially objec-
tionable are the limitation OF bank Dor
rowings on the security of their notes
backed by Government bonds ana the
restriction of rediscounting facilities to
banks making security collateral loans.
These provisions, if enacted, are likely
TO result in contraction OF credlt
rather than a healthy expansion, Whlch
is admittedly essential to- speedy re,
haoilitation OF economic ana ano Hn'aiaoiAA
conditions in the United States
The section of the bill dealing with
security affliates of banks, compelling
segregation through providing that GER
tiicates of bank stock cannot also rep
resent stock in an affiliated non-hank-
ing corporation, is also likely to en-
counter opposition. Experience covering
the past few years is bound to lead to
the abandonment of affiliates wherever
unprofitable or undesirable. This al
ready has been done in several in
stances. 1t therefore would seem that
each case would have to be dealth with
separately.
No difficulties are anticipated in con-
nection with meeting the fixed charges
of the Illinois Central or maturing OBJ
legations, says L. A. Downs, the presi-
dent. Moreover, he points out, the sys-
tenn expects to accomplish this without
applying for financial aid to the Recon-
struction Finance Corporation.
The service ON the debt for the cur
rent wear. as we'll as maturitieS OF about
81 900, 900, will be met out Of earnings
and cash on hand. Mr.. Downs states.
Due to unseasonal weather and the
corresponding decline in the consump-
ton of power, the earnings OF the Con-
solidated Gas Co. for the past year are
expected to show a slight decline as
compared with 1880 figures. Per share
earnings for 1881 are estimated at $4.93,
a decline of slightly more than z per
cent from the 1880 showing. This re-
suit must be regarded as gratifying ana
speaks well for the stability OF opera
tions, especially if account is taken OF
the fact that 1891 was year Of general
business adversely and that certain rate
reductions we're put into effect by the
Consolidated Gas System.
(Copyright. 1892, by the North American
Newspaper Alliance, lne)