The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-05
Hoover's Relief Plan

President Hoover quite properly has asked con-
GROSS n sneed action on his financial relief program
The banks are in need of help, credit contraction
has reached an unhealthy state and additional pro-
lection for bank depositors is required.
Unfortunately, the emergency is such that con-
gress will not have much time to consider these
measures 1t was very unfair and unwise Tor the
President to refuse to call congress into special ses-
sion in the autumn when adequate time could have
been given to this important program. But 1t VIII
do no good to lament that Hoover bsunder at this
late date.
Failure of the voluntary bankers corporation to
relieve the frozen credit situation, hoped by the
President when he initiated that organization last
summer has resulted in large part from the selfish
and competitive attitude of certain large banks and
from self-defeating regulations imposed by them on
the organization There again it is too late to cry
over what is past.
In the circumstances there is nothing left to do
except establish the federal reconstruction finance
corporation to reopen credit channels, as requested
bv the President in his special message to congress
Monday.
There is only one serious argument against 1t
that some bankers may try to use it to unload on the
government some of their worthless paper But surely
the bill can be drawn to prevent such misuse Of the
federal corporation and to remove that objection.
Other parts of the Hoover emergency program also
merit prompt action; such strengthening the fed
eral land bank system, plan to release part OF de-
postors funds in closed banks revision Of transpor-
tation laws in line with interstate commerce COM
mission recommendations, which will help railroad
bonds revision of banking laws for better protection
of depositors and tax increases to cut the budget
deficit
But some parts of the Hoover program, as out
lined to congress Monday, appear to us lnwse Most
economists and banking experts oppose the Hoover
proposal to tamper with the discount eligibility pro-
visions of the federal reserve law. And the Hoover
warning that the issue Of federal securities must be
restricted comes too late.
Because the administration cut taxes in times of
prosperity while running up federal expenditures
and because there is possibility of getting enough
additional tax revenue in hard times to meet the
huge operating deficit to supply unemployment
relief large new government bond issues are inev-
liable.
Hoovers statement relief, that "our people,
through voluntary measures and through state and
local action providing for distress" is disproved
by the facts if he means that adequate relief pro-
visions have been made.
A long line of social workers and experts, includ-
ing Director Burns of the National Community Chest
organization, to whom Hoover himself intrusted most
of the relief work, just have testified to the La Fol-
ette senate committee that state local agencies
not carry the relief load without federal aid.
Congress should give Hoover the reconstruction
finance corporation he requests and which obviously
is needed but congress should refuse to let the Pres
ident block federal aid to inadequate local relief
agencies any longer.