Evening star., 1932-01-16
ECONOMIC REFORM
PLAN GAINS FORCE
More Than 80 Leaders In
dorse Program to Restore
Better Times.
BY CLAUDE A. JAEGER,
Associated Press Financial Editor.

NEW YORK, January 16.--A finar1-
cial program to restore better times
indorsed by more than 80 leading econ
omists of the country-is rapidly taking
root, 1t was explained In prominent
banking quarters yesterday.
The program, as announced by War
rem M. Persons, consulting economist
to number of large corporations, is
based upon the conclusion that recov-
cry in the United States need not
await solution of Europe'S problems.
It urges credit expansion through
co-operation of the Federal Reserve
and the commercial banks, mainte-
nance of the gold standard, govern
mental economies and the acceptance
of the Reconstruction Finance Cor
poration proposal.
Bankers Reassured.
Banking leaders who commented on
the economists program, found IL
strongly reassuring, in view OF the
progress already being made toward
carving out the proposals, which the
economists believe will inject new LIE
blood into the business structure, tend
to restore values, increase employment
and strengthen banks. Bankers point
ed particularly to the Federal Reserve
systems recently initiated program OF
credit expansion, and the progress OF
the reconstruction finance bill in Con-
gress.
DR.. Persons, former professor OF eco
Monies at Harvard, said the program
had been finally agreed upon after two
months of interchange OF opinion, tnat
it had the approval OF numerous traos
associations. farm organizations and
prominent individuals. Among the in
dorsing group of economists are sucn
leaders as DR.. Edwin W. Kemmerer OF
Princeton, monetary consultant to sew
eral governments; DR.. Edwin r. A:
Seligman, emeritus professor OF political
economy, Columbia; William A. Ber"
ridge. economist, Metropolitan Life In
surance Co.; Prof. Frank w. Tausslg,
Harvard: Prof. Irving Fisher, Yale
David Friday, Washington economist
and many others.
The economists state that the depres-
sion will not cure itself, but requires
prompt, intelligent and vigorous actloh'
Economists Recommendations.
Their recommendations follow:
"The enactment of the bill establish
ing the Reconstruction Finance Corpora
ton to deal more effectively With emer-
gency situations; proper economy IN
municipal, State and national budgets
and increased taxation; q liberal Fed
eral Reserve policy, designed to cneck
credit contraction and encourage some
expansion, and a commercial oanKIng
policy cooperating with the reserve
banks in checking credit decreases ana
encouraging increases"
The commercial banking policy, they
saw. should include IAN increase In
sound investments; cooperating In AID.
ing necessary Treasury financing, ana
borrowing from the Federal Reserve
Banks when necessary TO meet these
and other sound needs"
It is explained that these recon-
mendations represent merely the high
est common factor upon which agree
ment among the economists was found
possible, and that matters not touched
upon are not omitted because they are
considered unimportant.
Must Halt Defation.
Regarding the proposed expansion Of
bank credit, it was recalled In wall
Street that George L. Harrison, COVER
nor of the New York Federal Reserve
Bank, recently pointed to the $6,5o0,-
600. 900 shrinkage in bank credit IN the
past two years, and said, "Dehation must
stop II we hope to see an early turn IN
the tide" He explained that reserve
has gold to provide an expansion OF
Federal reserve credit by 10000, 900,
which would be used as the base for q
stupendous increase In banking credit,
theoretically as much as $4,000, 900, 900.
Also, Charles E. Mitchell, in his an
nual report as chairman OF the National
City Bank, said on Tuesday, The chief
problem is to eliminate uncertainty and
fear as influencing factors, and so to
bring about a check to defiation end a
basis for a flow of reserve bank credit
that will give the banker greater abil-
ity to lend, reawaken in business men a
desire to proceed with their plans in
yolving the use of credit, and encourage
the investor to re-enter the security
markets"
(copyright, 1892, by the Associated Press)