The Bismarck tribune., 1932-12-06
Text of H0ouer Message to Nations Congress

within q few days grouping or cor
solidating over so executive and &C
ministrative agencies including
large number of commissions and "in
dependent" agencies.
The second step, of course, remain
that after these various bureaus an
agencies are placed cheek by jowl In
to such groups. the administrative of
ficers in charge of the groups sha]
eliminate their overlap and still fur
ther consolidate these activities
Therein lie large economies.
The congress must be warned tina
a host OF interested persons insid
and outside the government who's
vision is concentrated on some par
ticular function will at once protes
against these proposals. These SAM
sorts of activities have prevented re
organization of the government TO
over a quarter of a century. The,
must be disregarded if the task is t,
be accomplished.
Banking
The basis of every other and ever,
further effort toward recovery is t
reorganize at once our banking sys
tenn. The shocks to our economic sys
tenn have undoubtedly been multiplied
by the weakness of our financial sys
tenn. first called attention of tn,
congress in 1929 to this condition
and have increasingly recommended
remedy since that time. The subjec
has been exhaustively investigated
both by the committees of the con-
gress and the officers of the fedora
reserve system.
The banking and financial system
is presumed to serve in furnishing the
essential lubricant to the wheels OF
industry, agriculture, and commerce
that is, credit. Its diversion from
proper use. it's improper use, or it,
insufficiency instantly brings hard
ship and dislocation in economic life
AS a system our banking has failed
to meet this great emergency. 1t car
be said without question Of doubt thai
our losses and distress have been
greatly augmented by it's wholly in
adequate organization. It's inability
as a system to respond to our needs
is today a constant drain upon prog
ress toward recovery. In this state
ment I am not referring to individual
banks or bankers. Thousands of them
have shown distinguished courage and
ability. On the contrary, I am refer
ring to the system itself, which is SO
or 50 lacking in organiza-
ton. that in an emergency its very
jeopardizes or paralyzes
the action of sound banks and its in
stability is responsible for periodic
dangers to our whole economic sys-
tenn.
Failures Show Increase
Bank failures rose in 1881 to 1Ols
per cent of all the banks as compared
TO IL per cent of the failures of all
other types of enterprise. Since Jan.
/, 1880, we have had 1865 banks sus-
pend, with $4,000, 100000 in deposits.
Partly from fears and drains from
abroad, partly from these failures
themselves (Which indeed often caus-
ed closing Of sound banks), we have
witnessed boarding of currency to an
enormous sum, rising during the
height of the crisis to over 81 600 ,0OO,-
600. The results from inter reaction
Of cause and effect have expressed
themselves in strangulation of credit
which at times has almost stifled the
nations business and agriculture. The
losses, suffering, and tragedies of our
people are incalculable. Not alone do
they lie in the losses of savings to
of homes, injury by deprival
OF working capital to thousands of
small businesses, but also, in the
frantic pressure to recall loans to
meet pressures of boarding and in Ii
quidation of failed banks. millions of
other people have suffered in the loss
of their homes and farms, businesses
have been ruined, unemployment in
and farmers prices dimin-
ished.
That this failure to function is un-
necessary and is the fault of our par
ticular system is plainly indicated by
the fact that in Great Britain, where
the economic mechanism has suffer-
ed far greater shocks than our own,
there has not been a single bank
failure during the depression. Again
IN Canada, where the situation has
been in large degree identical with
our own, there have not been sub
Stantial bank failures.
r. F. c. Defended Nation
The creation Of the Reconstruction
Finance Corporation and the amend
ments to the federal reserve act serv-
ed to defend the nation in a great
crisis. They are not remedies: they
are relief. It is inconceivable that the
reconstruction corporation. which has
extended aid to nearly 5000 institu-
tions and is manifestly but a tenn
porary device, can 60 on indefinitely.
1t is today matter of satisfaction
that the rate of bank failures, of
boarding, and the demands upon the
corporation have great
ly lessened. The acute phases of the
crisis have obviously passed and the
time has now come when this ma
tional danger and this failure to re-
Spond to national necessities must be
ended and the measures to end them
can be safely undertaken. Methods of
reform have been exhaustively ex-
amined. There is no reason now why
solution should not be found at the
present session Of the congress. In
flation of currency or governmental
conduct Of banking can have no part
IN these reforms. The government
must abide within the field of con-
structive organization, regulation, and
the enforcement Of safe practices
only.
Parallel with reform in the banking
laws must be changes in the federal
farm loan banking system and in the
joint stock land banks. Some of these
changes should be directed to per-
manent improvement and some emer-
gency aid to our people where they
wish to fight to save their farms and
homes.
1 wish again to emphasize this view
that these widespread banking re-
forms are a national necessity and
are the first requisites for further re-
covery in agriculture and business
Thev should have i'm n, erIiate coosid