Evening star., 1933-10-10
ROOSEVELT SCANS
FROZEN FUND PLAN
President and Aides Discuss
Machinery to Free Mil
lions in Banks.
BY che Associated Press.

BY the Associated Press.
Organization OF Federal institu-
ton to pry loose the frozen deposits OF
closed national and State banks was
discussed by President Roosevelt at a
series of conferences today with ad-
ministration heads.
Official announcement of the plan
had been looked for by tomorrow, but
j. F. T. O'Connor, controller OF the cur
rency. said legal questions had arisen
which probably would delay it.
He was the first of several officials
called in by the President.
Attorney General Cummings discussed
the legal points, including the security
issuing powers of the Reconstruction
Corporation, which will figure in the
new set-up. and how those powers re-
late to the Treasury.
Tied up with the deposit-thawing
process is the Presidents project to ex-
pand credit. Henry Morgenthau, jr.,
governor of the Farm Credit Admins
tration. was one of the White House
conferees He was accompanied by Her
man Oliphant. counsel for the farm
credit agency, and Stanley Reed, coun-
sci for the Reconstruction Corporation.
Harrison Calls.
!. George L. Harrison, governor OF the
Federal Reserve Bank of New York,
also was a caller, but he, like the rest:
refused to divulge the exact nature OF
the plan under consideration.
Although officials were loath to talk,
It was understood that the general plan
called for organization of corporation
with a capital of possibly as much as
a billion and a half dollars, headed by
Bruere, with a board of directors COM
posed of the heads of other Government
credit corporations.
The tentative proposal was understood
to call for the purchase by the Recon,
struction Corporation of the preferred
stock of the new corporation. which
would receive R. F. C. debentures
With these, the corporation might
take over the frozen assets OF closed
banks up to so per cent of their deposits.
The debentureS could be caShed by
Federal Reserve Banks.
The latest figures available. for Sep
tember %. showed that the deposits OF
national. State member and non-mem-
Der banks which are under receiverships
or conservatorships, totaled Sl765, ,669.-
COO That figure did not include de-
posits in mutual savings banks.
Roosevelt Feels Step Improvement.
The President was represented as feel
ing that the release of frozen deposits
is one of the most important steps in
his recovery program at the moment and
that the release Of almost billion dol
lars would give tremendous impetus to
the effort to stimulate consumer pur-
chases which the N. r. A. is undertak-
ing its buy now" campaign.
The plan upon which the controller
is working is for the longer pull" He
already has approved home loan bonds
for the portfolios of national banks and
recently permission was given to re-
ceivers to convert long-term assets into
home loan bonds. which in turn may be
sold in the market. The rate at which
the exchanges are made is subject to
individual negotiation; in other words,
a bank or receiver in exchanging slow
paper for home loan bonds has to make
the best trade possible.
The Treasury is working out the same
plan for the conservators In an effort
to facilitate reorganization or payment
to depositors.
A statement issued today by the con-
troller said that, at the end Of Septem-
ber, 462 per cent of all the national
banks in the 48 States and the District
of Columbia that remained closed after
the bank holiday had been licensed,
chartered or lquidated
On March Is there were 1,446 un-
licensed national banks. On September
30, 778 were still unlicensed. The con-
troller said plans had been approved
for the reorganization of 376 of those
remaining unlicensed and plans disap-
proved for 271.
Plans were under consideration for
104 and there were no plans for 27.
Unlicensed Bank Totals.
Deposits in the unlicensed national
banks on September 80 totaled $67l,-
OBI 900 frozen and $50,668,O00 unre-
str1cted. Reorganization plans had been
approved for banks with frozen deposits
of S398.735.000 and unrestricted de-
posts of S3l, ISL 900; plans had been
disapproved for banks with 1922 1876 900
in frozen and $9.171 900 in unrestricted
deposits; plans were under considera-
lion for banks with S110, 562 900 frozen
Pnd S8,956,000 unrestricted deposits;
Rnd the 81 national banks for which
no plans had been made had $39, ,4O8,-
poo frozen and $1,309,000 in unre-
6tricted deposits.
Treasury officials were careful to
point out that the plan under which it
jwaS proposed to release a percentage
fOf deposits did not mean wholesale i'm
}nediate reopening Of banks, because the
plan for the reorganization Of each
closed bank must be approved by the
Treasury It was expected, however,
TO facilitate reorganizations by making
money available.