Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-11-19
Imitation Plan Misses Fire
and National Credit
Is Lowered.
SELLING OF SECURITIES
REDUCES BANK ASSETS
Drop in Values Said to Have
Brought Change in Status Re.
ported for Guaranty System.
BY CHARLES F. sPEARF.

special DlSpatch 10 The Star.
NEW YORK, November Is.-The in
nation program Of the Government Is
sun missing fire so far as its main pur-
poSe-tnat Of materially raising COM
modify priests concerned. AT the
same time, the effect of 1t is to debate
Ine vaIue OF all kinds of high-grade Sc
CurltleS, 10 lower national credit and
to disturbe confidence.
while new agencies are being created
to support weak situations, these situa-
IONS are undermined by the constant
aooltlon to debt that already is of
tons may be fantastic
one OF the tncongruities Is In the
Held OF banking, where Government
funds have been appropriated 10 assist
liquidation and SO relieve depcsitors of
closed institutions.
Meanwhile. the sale Of securities by
frightened investors Is daily forcing
down the value of the assets of the
banks. The examinations of a few
weeks ago to qualify them for the de-
post guarantee corporation now are
worthless If true picture Of their con-
dition is to be obtained.
Dollars Fall Accelerated.
Depreciation of the dollar. apprecia-
ton of foreign currencies, has assumed
quicker pace this week. The point
has been reached and passed where a
60-cent dollar seemed the objective.
The goal now appears to be a dollar of
half its old gold value
The strange feature of this latest
phase Of the monetary plan is that the
dollar has fallen faster with the gold
price unchanged than when it was be-
ing raised day by day. The clear inn
phcation of this is that American can.
ltal Is In flight to foreign money centers
ana is being exchanged for securities
payable IN European OF Canadian cur.
rencies. There also is speculative Of
iering OF the dollar. The foolish still
short
That We already are wen along the
road leading to initiation admits Of nc
dispute. The surprising changes lust
made in the personnel of the Treasury
leave no doubt as TO the retreat Of the
sound money group there. Il must be
Illuminating to the bankers of the .coun.
try That, IN the hour when their advice
should be sought on the most important
nScaI policy in half Q century. they are
ignored not because they might be m
wise In their judgment, but because the
pubic at large has lost confidence in
them and has the suspicion that there
are others Of the Mitchell and Wiqrin
type IN the fraternity. This is unfor-
- runase ana unjust. But it is under
standaole. 1t is a business tragedy that
aggravates the crisis through whic,, NE
are passing and removes from act,o,,
men who should be effectively dealing
with it. eeoAiis
Credit Imitation Mounts.
Inc fear Of direct currency imitation
or the issue OF fiat" money is decreas7
ing, but the conviction that credit in
nation on huge scale cannot be
avoided has taken hold of the business
world. This is founded on the mani
!olo plans that have already been made
Tor assisting debtors of various sorts and
degree and the estimate recently pre-
pared by the National Industrial Con-
ference Board of appropriations in ex-
cess OF SIS 100000. 900 that figure con-
tLgehtly In the Government balance
The question is asked, How are these
great sums to be raised and what effect
VIII they have on outstanding obliqa-
uons? The answer to a part Of il Isl al
reauy being given In the disturbance in
the Government bond market, in the abb
sence of bids for high-grade railroad
and public utility bonds and the recent
of prices for State and
municipal issues. Those groups of cor
poratlon bonds that are most familiar
20 the examiner Of bank portfolios
nave mad an abrupt fall this month
winch might easily compel an upward
revision OF the requirements of insti-
buttons that need additional funds In
support their capital structure.
The sale next Monday of $50 600 O00
Of Treasury bills may give hint of the
changed attitude of the regular BUYERS
Of this paper toward it. The last Of
ferlng two weeks ago was at an aver
age discount OF 0.24. compared with O.IO
early in October The Treasury has a
,alance in excess of 81. 800, 900 900 which
e VIII need successfully to effect its De-
,ember Is financing.
Public Shows Concern.
BY and large the country is not vet
nnation- conscious. It has watched the
iecIne N the dollar without under
itanding its meaning. But it has not
Segun 70 buy commodities, stocks or
merchandise to any extent as a hedge
against the depreciation in its fixed in
crest securities or to protect itself
against a rise in the cost of living
S worried more by what it sees in thu
orm OF huge subsidies to special group.
" the program of relief which closely
the dole" and the slow
less with which business and income
part from those of factory operatives
espond to the N. r. A. program, IL
Which confidence is steadily falling.
There is, however, healthy demand
or goods. Retail sales support this
act. The weather this week has been
ieipful in stimulating merchandise de-
nand. Industrial output in several d.
ections is greater than the week pre-
1ous. The iron and steel trade ap-
ears 70 have dipped to IDS low level and
ow Is recovering. The latest figures
electrical power production and those
car loadings are more satisfying.
There Is a faint hope that with the
lore rapid fall in the dollar and the
cute disturbances in the investment
iarkets that attend it, the gold buying
nd dollar depreciating program NAV
BON reach its final phase and one thai
Irns in the direction of sterilization
the dollar be substituted Unless the
usiness and banking world is soon con
rmed in this belief. we will enter
Iinter as drab as that last year and
18th the possibilities of sacking thu
,FfTIY1pc Qf the Yaa1r1Ia 11ao fav e,,-,, 49,.