Evening star., 1932-02-28
PRESIDENT PRAISES
CREDIT MEASURE IN
PLACING SIGNATURE
Chief Executive Optimistic in
HaiIing Bill as National
Defense"
NON-PARTISAN ACTION
OF CONGRESS LAUDED
Believes Economic Blows From
Abroad Ended and Bar to Pros
perity Removed.
By the Associated Press.

I
Hailing the Glass -Steagill credit ex-
psnsion bill as a national defense
measure" capable of placing the re-
sources of the Federal Reserve Bank
beyond any conceivable raid from al
home or abroad, President Hoover late
yesterday signed 1t into law.
Immediately after afhxing his sig
nature, the President issued a state
ment in its praise. He coupled appre-
citation for the non-partisan action upon
it with a plea for continuation Of the
submersion of politics in Congress.
The Chief Executive was optimistic
last night over its effects. He saw in
the bills provisions for a theoretical
credit expansion of $4,000, 100000 an6
possible currency expansion of $780,
600, 900, direct bombardment upon the
credit contraction he believes has par
TALLY barred the path to economic re-
covery.
Sees Bar TO Prosperity Removed.
Believing the series of more than q
score of economic blows from abroad
have come to an end. the President
feels that with the bills controlled
credit expansion and turn In the TIDE
of boarding there will be an end of the
conditions that have slowed agricul-
ture. industry and commerce.
Figures were compiled by admins
tration officials yesterday shortly before
the bill was signed, to show that $780,
900 900 of boarded currency has been
returned to circulation since Febru-
ary 4.
In his formal statement, the Presi-
dent spoke publicly for the first time
Of the withdrawal of gold reserves from
the United States by foreign nations.
He declared the Glass-SteagaH bill
should accomplish two immediate OBJ
jectives, which he named as follows:
Objectives Cited.
First. In a sense this bill is a ma
tional defense measure. By freeing the
vast amounts Of gold in cur Federal
Reserve system Gin excess of the gold
reserve required by law, 1t so increases
the already large available resources OF
the Federal Reserve banks as to enable
them beyond question to meet any con-
ceivable demand that might be made
on them at home or from abroad.
Second. 1t liberalizes existing pro-
visions with regard to eligibility Of COL
lateral and thereby enables the Federal
Reserve banks to furnish accommoda-
tions to many banks on sound assets
heretofore unavailable for rediscount
purposes"
Highly technical in its provisions the
bill provides that for one year, until
March 3, 1888, member banks with a
capitalization of less than $5,000,000
may rediscount paper not previously
eligible. 1t will open new credit chan
nels to all but 81 of the 1900 member
banks of the Federal Reserve System.
Groups of five member banks may en-
joy these special rediscount privileges
permanently beyond the one-year limit.
officials have estimated that ap-
proximately $750,000000 in gold now
used as backing for currency above the
40 per cent requirement will be released
by the measure. Under it Government
obligations may be used as backing for
new currency.
After praising the cooperation by
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