Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-17

the nervous wreck that is
~ business.
The injection, to be author
lied by Congress in passage ot the
Presidents Reconstruction Finance
Corporation, is to be given where 1t Will
do the most good-in the sorely affiicted
nerve center of all business, the imam
cial system.
That system reaches out into every
part Of the great industrial whole, ana
any disturbance Of the ganglion Is felt
throughout the structure.
Just now the financial nerve center
is suffering from bad case OF 1rp1e.
assets. This condition, brought apouC
bv state Of melancholla lnouce9 py
the depression has been followed by
@ ,ntnms of PARALYSIS touching the far
aches of industry. AS result, nuGii
of the Nations business has what Is
commonly called the filters.
Double BarreIed Tonic.
President Hoover and his economic
advisers decided the patient neeoea a
double barreled tonic, potent WI VI
credit and confidence. The greater u
these ingredients, 1t was agreed, Is coii
fidence An injection OF creolC py
doctor in whom the patient mas nSv.e
CONFIDENCE would be of doubtful 'alue'
1rhe solution was a stimulant pre-,
nared administered and guaranCetea
Internationally by the United o'a'eS
Government itself. -, tho
Snch a remedy is provided by tne
new neacetime War Finance C ol poi 10
ton the real name OF Whlch WI W
the Reconstruction FINANCE W taS IN
tin,, creation Of which was Voteo III
r utoa,, time by Congress last week
r T,oore arc a few minor items TO De
smoothed out in conference before Iie
IaoisIation goes to the White HOUSE
fo@ SIGNATURE of President Hoover.
iot THE measure will set Uncle sam up
as a specialist in first aid. Loaolls d
hvnodermic with $500 Oo0, ovo rom s.io
iI,IGted states Treasury, with a reserve
" e. 900 600 600 from possible oono
iSsuas the countrys old reliable pnysl-
Ian will give the banking system rev
baaIthv shots" Of credit, lrlenaiy
Sian on the back for confidence ana
oI,srantee of favorable results Ill 'iio
Immediate emergency, at least.
salutary Effect Seen.
rhe mere knowledge that the hypo9-
darmic is available and tnat oilo .H
Sam in person, will administer ~ San
have a salutary effect, econoriisCs S
clare The Nations financial tiouoio'
are largely psychological In orlgin; a. a.
cording to those who nave S'uoieo VAC
situation ,,, ,4 +he hanks
SS +ha;r correlated fellows in distress
~ insurance companies and rallroaosI
srredit IL is hoped, will be restoleu,
frooan assets will be released, money
will 90 into circulation, and business
IN general will be benefited, 1t Is
pointed out. .,.,.
Thus the corporation is not class
,.oieIst,on for the bankers and lnsur-
ance men and railroad interests, ouI
General restorative for all branches Oh
industry. ob,se+ts
in supporting the plan on the moor oi
the House. emphasized the oroao
ameIiorative potentialities mVoiVeo'
"If we let the people know ne SAID,
chat the resources OF the GoVerilIhen'
are at their command IN case Oh heeu,
then we hope to have preclseiy .ne
same thing that happens in the course
~ r,r,s on hanks. when anxious deposit
tors will stand in line for hours. ana
IN finally reaching the tellers WINDOW
and learning that they can get theT
money throw overheard any WISH 10
oct the money and ask to leave II III
the bank. l.
m tell the people of the United states
that the Government is going 10 save
them Therefore. the value OF our leg
islation is in proportion to the extent
to which 1t will allay fear.
Everybody to Benefit.
ut is my own belief that If once you
set going the tractors across the
prairies. if you once set gong the
wheels Of our factories, If you once set
going every form of industry and &C
tivity, the benefit will reach to every
citizen, and that is the only way
know by which you can put an end 10
this depression.
The new corporation, with nail
billion dollar capitalization subscribed
nv the Government and authority to
sell bonds for an additional billion and
a half, if necessary, will be composed
of seven members, three of whom are
ex-officio members and four appointees
of the President.
The House bill would make the Sec
retaries of Agriculture and OF the
Treasury and the governor OF the Fed
eral Reserve Board ex-officio members
of the corporation. while the Senate bill
substitutes the Federal Farm Loan
Commissioner for the Secretary OF
Agriculture. This discrepancy, along
with other differences, must be ironed
out in conference.
The President will appoint the four
other members, who may be officers Of
the Government.
The corporation will have authority
to make loans to banks up to 10 per
cent of their capital stock, taking as
security paper which is known to be
sound but not capable CT being liqui-
dated under the stress of present con-
ditionS.
Cash to BE Turned Loose.
Liquidation of these frozen Securi-
ties will turn loose cash with which
impending bank failures may be
averted and the resources of depositors
conserved. Credit will be re-established
and the normal course of business
aided.
The Federal loans will be available
Let our debtors pay or refuse to pay.
If foreign governments should fail or
T fn ~