Evening star., 1933-04-04

to work fast enough to provide for all
reopening on the same day. We
adopted the plan of first permitting re-
openings over three days, beginning
with March Is. The program was
launched with the radio statement of
the President, and fear was replaced by
confidence.
Reopening of State Banks.
The Federal Government did not have
any connection with State banks not
members of the Federal Reserve system,
and there was strong feeling that these
banks should be handed back to State
authorities. So by the Presidents order
of March 10. it was provided that State
authorities should pass on the reopen
ing of non-member State banks. Every
effort was made to assure cooperation
by State authorities in following the
national plan of reopening only sound
banks.
BY the end of March 5,387 national
and member State banks that had de-
poSits of nearly S26, 900 900 900 had been
reopened. In addition more than 1850
non-member State banks had been re-
opened on an unrestricted basis. This
restored to the people and to the busi-
ness of the country the use Of the maj jor
part of the banking facilities.
The task of reopening banks, which
could not be reopened in the earliest
days, but which could be made sound,
was undertaken at the very outset. The
new act provides that the Federal Gov
ernment can assist in this process where
necessary by having the Reconstruction
Finance Corporation subscribe for the
preferred stock. The Government is
proceeding on the basis of supplying
such capital where conditions warrant
on the plan that not less than half the
needed capital would be furnished from
private sources.
The work of restoring banks is going
forward rapidly. In the l6 days from
March Is through March 81 the office
of the Comptroller of the Currency
supervised the strengthening and re-
organization of 28s national banks.
with deposits of about SASS ,0O0, 900, so
that those banks were made available to
the public on the same solid basis as
the banks reopened in the first days.
$3o,000,00 New Capital.
A total of nearly $3O,0O0,0 900 Of new
capital funds was put into these 289
national banks. In the case of these
institutions less than $550,O00 of new
capital was to be furnished by the Gov
ernment. Almost all of it was furnished
by private subscriptions and contribu-
tions. Such record indicates the
enterprise and resourcefulness of the
communities in which these banks are
located.
There has naturally been great in
terest in the organization with Govern
ment assistance of large bank in the
CITY OF Detroit. The facts are simple.
The deficiency of banking facilities in
this great center was a matter of grave
concern. The situation was complicated
by conflict Of interests that threatened
indefinite delay. To provide an ADEQUATE
new bank S12 100000 of private funds
were underwritten through public
spirited action and this amount was
matched by an equal amount of Gov
eminent money supplied on preferred
STOCK. For the time being the Govern
ment will have its stock as an invest
ment' put Will as developments permit
retire from this ownership.
Thcs there was created large new
pank which was Immediately able to
provide essential banking services and
can serve at an early date as an in
valuable agent for making available a
large portion of the deposits in banks
which could not be reopened
Vast Labor Involved.
1 found that the work of reopening
the banks imposed a tremendous task
on the Treasury organization, including
the office of the Comptroller of the
Currency. 1t also imposed vast labor
upon the Federal Reserve Banks. The
Treasury organization and the Federal
Reserve Banks have responded with
zeal and devotion worthy of the best
traditions of patriotic service.
have said that the new act makes it
possible to conserve the resources of ma
tional banks which could not be i'm
medlately reopened, and some of which
cannot be reopened. 1t is the policy of
the Administration to carry on this
work OF conservation in such a way as
/ TO keep losses of depositors at a mini
mum and to secure orderly and intelh-
gent liquidation where liquidation is
necessary You may be assured that
values are not to be sacrificed unneces-
sarlly. and that debtors are to be given
all T-asonable opportunity to work out
| their situations.
win the reopening of the banks came
large return flow Of money to the
banks. Between March and March 80
there was returned to the banks a total
amount Of about 1,160, 900 900. includ-
Ing more than $500, 200, 900 of gold coin
and certificates. The unnecessary with
draWal CT currency was, as I have said
one of the causes of the trouble. Cur
rency which is boarded is sterilized
ana lmpedes the operation of business
Gold which is boarded removes a part
OF the base of the currency and OF
credit. The volume of outstanding cur
rency is still greatly in excess of the
amount required to meet ordinary needs
under existing conditions. 1t is essen
tial that this inactive currency shoulc
continue to flow back to the banks. II
the amount of money still boarded car