Evening star., 1932-09-11
HOOVER'S ELECTION HOPES
STILL LINKED TO TRADE
Victory, if Depression Had Not Come
Held Unquestioned-Present Re-
covery Holds Key.

1He dtLlIuQe treSlQenC hoover ADOPT
ed, the sight of courage on our part.
begat courage on the part of those
European countries and individuals
who in panic were taking gold away
from us literally as fast as ships could
be found to carry it. (Only given
amount Of gold can be insured on any
one ship) Our calmness caused panicky
Europe to pause
During the pause they reflected upon
the safety of the countries to which
they were taking their gold. If the
United States was not safe, what nation
| was? Presently it ,dawned upon them
that In an extremely panicky world
perhaps the United States was the
safest place for nervous ounce Of gold
to be deposited. With that thought, the
run on us ended.
Presently gold began to come back to
us. In the meantime, legislation had
been put through Congress making our
gold basis at once more secure and
more flexible. We could no longer be
menaced by withdrawal Of gold in ex-
cessive degree. That is our position
today. Gold is accommodating with us
because the world recognizes us as
safe.
Wanted Money Repaid.
The second principal form of the at
tack upon us from panicky Europe
was the withdrawal of cash and credits
Without attempting to put it in techni-
cal terms, and therefore without being
exact, all the people In Europe who
had money due them from persons in
The United States asked for their money
Speaking roughly, every European cred
itor ao'Sed his American debtor to pay
up. We paid. They got their money.
The net balance was something like
$4,000, 100000.
1t Is paid. It cannot be demanded
again, for We no longer owe it. We are
today in the position of a man who had
a note due at the bank, who saw the
bank get nervous, saw the bank refuse
to extend the note-and who thereupon
paid the note. We paid with difficulty,
but we paid. We no longer owe any,
thing to the nervous European bank.
That form of attack obviously cannot
be made upon us again.
Here again. as in the case of the ner-
vous bank and the borrower who pays
up, there is change Of attitude on
the part of Europe, Europe has come
to think of America as safe, as a good
place to keep cash balances. AS Europe
IS sending gold to us, so is she In effect
business men and investors are coming
to enjoy having Americans owe money
to them.
Third Phase Of Attack.
The third attack upon our fiscal
safety during the panic in Europe took
the form of selling OUR securities. Eu-
rope, in state of panic, threw Amer
ican securities upon the market for any
nriPn fhou
went down. The lowering of quotations
undermined our own credit structure.
If an American bank had loaned money
to an American borrower upon the Sc
curity of a bond quoted at 100 and il
panicky European selling caused the
quotation to go to so (aS in many cases
1t did the solvency of our banks, in
Surance companies end savings banks
was threatened. Not merely threat
ened Some of our institutions were for
a few weeks actually insolvent, as meas
ured by quotations of securities in their
vaults. That was the condition in May
and early June.
That. like the other attacks is now
over. Europe. in an abrupt reversal of
sentiment, has come to think Of Amer
ican securities as peculiarly safe and
desirable. Europe is buying our securi-
ties: quotations Of many, especially
bonds, have gone back to approxi-
mately normal. Our institutions are
safe. II from now on an occasional
small bank fails, it will be for reasons
which would have caused 1t to fail in
any normal time.
The storm is over. We are through
it. and through without the ultimate
disaster, the collapse, which Europe
(and some Of our own less courageous
citigens) believe. about to come. Incl
dentally. being through the storm, we
are on sound basis for growth, and
the growth is already under way.