Evening star., 1933-03-13

the Treasury have already been found
to be all right. This viii be followed
on Tuesday by the resumption Of all
their functions by banks already found
to be sound in cities where there are
recognized clearing houses. That means
about $50 cities of the United States.
On Wednesday, and succeeding days,
banks In smaller places all through the
col ry will resume business-subject,
OF SHse, to the Governments physical
ability to complete its survey. It is
necessary that the .reopening Of banks
be extended over period in order to
permit the banks to make applications
for necessary loans, to obtain currency
needed to meet their requirements and
to enable the Government to make COM
mon sense check-ups.
Let me make 1t clear to you that If
your bank does not open the first day.
you are by no means justified in believ-
ing that 1t will not open. A bank that
opens on one Of the subsequent days is
IN exactly the same status as the bank
that opens tomorrow.
State Banks to BE Aided.
know that many people are worry
Ing about State banks not members of
the Federal Reserve system These
banks can and will receive assistance
from member banks and from the Re-
construction Finance Corporation.
These State banks are following the
same course as the National banks. ex-
cept that they get their licenses to re-
sumo business from the State authori-
ties, and these authorities have been
asked by the Secretary of the Treasury
to permit their good banks to open up
on the same schedule as the national
banks. I am confident that the State
banking departments will be as careful
as the National Government In the pol
ICY relating to the opening Of banks,
and will follow the same broad policy.
1t Is possible that when the banks
resume. very few people who have not
recovered from their fear may again
begin Withdrawals. Let me make it
clear that the banks will take care of
ali needs-and it Is my belief that
boarding during the past week has be-
come an exceedingly Questionable pas
time. 1t needs no prophet to tell you
that when the people find that they
can get their money-that they can
get 1t when they want it for all legiti-
mate purposes-the phantom of fear
will soon be laid. People will again be
glad to have their money where it will
be safely taken care of, and where they
can use 1t conveniently at any time. I
can assure you that it is safer to keep
your money in reopened bank than
under the mattress
The success of our whole great ma
t1onal program depends, Of course, upon
the cooperation of the public-on its
intelligent support and use Of a re-
liable system
Remember that the essential accom-
pllshment OF the new legislation is that
1t makes it possible for banks more
readily to convert their assets into cash
than was the case before. More liberal
provision has been made for banks to
borrow on these assets at the Reserve
banks and more liberal provision has
also been made for issuing currency on
the security Of these good assets. This
currency is not fiat currency. 1t Is
Issued only on adequate security-and
every good bank has an abundance of
such security.
As to Reorganizations.
One more point before I close: There
VIII be, OF course, some banks unable
TO reopen without being reorganized
The new law allows the Government
10 assist in making these reorganiza-
tons quickly and effectively, and even
allows the Government to subscribe to
at least a part of new capital which
may be required.
1 hope you can see from this ele-
mental recital of what your Govern
ment is doing that there is nothing
complex, or radical, in the process.
We had bad banking situation.
Some OF our bankers had shown them
selves either incompetent or dishonest
IN their handling of the peoples funds.
Iney mad used the money entrusted to
them in speculations and unwise loans
This was, Of course, not true in the vast
majority of our banks, but it was true
In enough of them to shock the people
Tor time into a sense of insecurity
and to put them into a frame of mind
where they did not differentiate, but