Evening star., 1933-02-21
MESSAGE OPPOSES
ALLOTMENT PLAN
Hoover Sends Special Note
to Congress Pleading for
Economic Legislation.

Congress was injected today Fecohi-
mendation by President Hoover 1or en-
actment of economic recovery leglsla-
ton coupled with open opposition 10 tne
domestic allotment farm relief measure
His views were made known in spe-
rial message sent to Congress late yes
terday without advance notice. Al
about the same time, the Senate Voteo
to make one of the measures ne aoVo-
cated-bankruptcy legislation-lts pend
ing business.
Hits Allotment Plan.
President Hoover apparently SOUNDED
the doom of the farm relief measure
for this session when he said the allot,
ment plan sis wholly unworkapie anu
"will do far greater harm than good 10
agriculture" He urged a temporary
leasing of marginal lands instead. -,
In addition. he described publicity OF
peconstrlction Finance Corporation
loans as destroying the usefulness OF
that lending agency.
Action was urged on the general
principles embodied in the Glass bank-
ing bill; the Great Lakes-St. Lawrence
seaway treaty: authorizing the Recon-
struction Corporation to increase the
amount of relief loans to states anu
municipalities. and his proposal TO au-
thorize the President to impose an arms
embargo against other nations wnen
war threatened.
Conceding such law coulo not oe
enacted this session, Mr.. Hoover also
proposed an inquiry with a view to the
early expansion of the home loan dis
count banks into general mortgage
discount system, to be owned coop
eratively by banks and mortgage COM
panies.
Passage Appears Likely.
Considerable debate is expected on
the bankruptcy measure, with hken-
hood that it will be revised considerably
on the floor, but its ultimate passage
appears likely.
As passed by the House, it lacked the
special provisions for dealing with farm
indebtedness that were proposed by the
Democratic Senate leader, Robinson of
Arkansas, and incorporated in 1t by the
Senate Judiciary Committee.
These sections provide for the ap-
pointment CT Cancellation commission
ers" in the Nations farming counties to
extending the farmers debts by ne
gotiaticn with his creditors.
Text of Message.
The following is the full text Of the
special message:
There are certain measures looking
to the promotion of economic recovery
which have been under consideration by
the Congress and are so advanced to-
ward completion or understanding as
to seem possible OF enactment during
the present session.
81. 1t is most necessary that the prin-
ciples of the bankruptcy bill which has
already been acted upon by the House
should be passed by the Senate. The
whole object of the bill is to secure
orderly cooperation between creditors
and debtors, whether farmers, tndi-
viduals, general corporations or rail-
roads, for mutual adjustment which
viii preserve the integrity and con-
tinuous operation of business, save the
values Of good will and the continu-
alton of people in their occupations
and thus avoid destruction of the
interest of both parties This legisla-
tion is of the most critical importance
in this period of readjustment. Incl
dentally, such a workable system Is
highly necessary in order to permit
certain minority of railroads to be so
reorganized as to reduce fixed charges
Finance Corporation of drains in pre-
vention Of destructive receiverships.
20. The Great Lakes-St. Lawrence
seaway treaty should be ratified 1t not
only will serve great national pur-
pose, but is of importance now also to
relieve unemployment by its construc-
tion.
"3 The enactment by the House of
the general principles embodied in the
Glass banking bill. which has already
passed the Senate, will greatly contribute
to re-establish confidence 1t is the
first constructive step to remedy the
prime weakness Of our whole economic
hfe-that is organization Of our credit
system.
Authority to Increase Loans.
81. Authority should be given to the
Reconstruction Finance Corporation to
increase the amount of loans to States
and municipalities for purposes of as
sistance to distress on the same terms
as the present act. While the corpora
ton has funds available which will last
until July, it is desirable that they
should be supplemented.
"5 1t seems clear that the domestic
allotment plan is wholly unavoidable.
1t will do far greater harm than good
to agriculture. Pending the return of
the great commercial countries to the
gold standard and the consequent in
crease in world consumption and thus
rise In world prices, 1t is essential tenn
porar1ly to reduce farm production so
as to remove the back-breaking sur
pluSes of agricultural products and
thus to raise agricultural income The
plan proposed by the Secretary of Agri-
culture some time since for temporary
leasing of marginal lands is the least
harmfu! and the most hopeful of all
the plans which have been proposed.
It has the merit of direct action in re-
ducing supply to demand and thus un-
questionablX increasing prices: it would
affect all farm products; give equal
benefits to all farmers: is free of in
creased bureaucracy; very much less
costly, and could be covered by a
manufacturers excise tax Of probably
! per cent to 2 per cent upon these
commodities 1t would also largely
eliminate the tax and interest problems
which the Congress is seeking to solve
at much greater cost
&c. l earnestly recommend repeal of
the procedure of the House of Repre-
sentativeS in publishing loans made by
the Reconstruction Finance Corpora
ton. These transactions should be
open to the fullest degree to the repre-
sentatives of the Congress. but their
PAOAAOoIiOll III Illc ldSI lew IuOHtIlS mas
led to widespread. mostly innocent mis-
interpretation, vicious in effect, by de-
poSitorS and alarmistS who do not
recognize that such borrowings repre-
sent an endeavor of the institution to
provide funds needed in service to their
respective communities. This publica-
ton is destroying the usefulness and
effectivnesS Of the Reconstruction Cor
poration, IS eXaggerating fears and is
introducing new elements of grave
danger. 1t is drying up the very sources
of credit. The effect of such publica-
ton is forcing payment by distressed
debtors to replenish bank funds 1t is
causing the boarding of currency.
Home Loan Banks Extension.
az. While the Congress could not