The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-11
TO
PUT COUNTRY
ON ITS FEET
President Ready to Weed
Out Good From Bad in
His Drive.
PLANS NEW SETUP
Convinced Whole Nation Is
SoIidIy Behind His
Driving Tactics.
BY RAY TUCKER
Times staff Writer

Times staff Writer
WASHINGTON. March In
order to clean up the nations bank
ing system, state and national, Pres
ident Franklin D. Roosevelt will re-
tain dictatorial power for a long
time. despite expectation of partial
reopening of banks within the next
few days.
Under the Fletcher Steagall act
lust passed at his request, he can
continue as banking car While
treasury regulations permit the
nations banking mechanism TO
function.
But it is the Presidents plan vir-
tually to liquidate the nations banks
through federal and state author1-
ties, to weed out the good from the
bad. and then present program Tor
permanent reconstruction.
Mr.. Roosevelt will take advan-
tage of the present situation to rem
ovate and then reform national and
state institutions, and to carry out
his inaugural pledges. Had it not
been for the emergency, he might
not have been able to reach state
systems; but now ne can.
Now Is the Time to Act
The power invested in him by
congress- may point toward strength
ening and possible unification OF the
forty-nine banking structures OF the
country.
The success which has met the
chief executives moves in the legis-
lative and financial fields has con-
vinced him that now is the time to
act. The speed with which con-
gress enacted the currency eXpan-
sion measure and continued his
wartime power, and the popular
reaction, lead him to believe the
nation is behind him.
Reforms proposed by leading
bankers, including those advanced
by w. w. Aldrich, head of the Chase
National Bank of New York-the
worlds greatest banking institution
indicate that former foes Of even
minor changes now are ready to go
along.
System Near Collapse
In short, the nation may be fac
ing as revolutionary an alteration
in its banking system as it did when
Woodrow Wilson and Carter Glass
| Dem, Va created the federal re-
serve system twenty years ago. Al
though reluctant to admit it, it is
conceded in official quarters that
the system approached collapse I'M
der the strain of changed industrial
and financial conditions.
Measures to enable banks to re-
open and perform normal functions
during the period of real reform
already are under way by means OF
treasury regulations. Any bank, no
matter its condition, may reopen at
once to handle cash for such hui
manitarian purposes as pay rolls
and life's necessities.
Treasury officials expect state au-
thorities to see that this regulation
is complied with, but not over
stepped.
The twelve federal reserve banks,
which are the main reservoirs of
| the system, were authorized to open
today for distribution of new cur
rency and conduct of usual opera
lions in their districts.
Member banks of the reserve, act
ing through the federal reserve
banks of their districts, may obtain
a license to resume all business from
the secretary of the treasury as soon
as national examiners are satisfied
as to their soundneSS and Solvency.
State banks may resume full OPP
erationS when they have convinced
state banking authorities that they
are solid. Although complete juris-
diction over state banks rests in
Secretary William H. Woodin and
the controller of the currency, and,
theoretically, they must obtain
treasury licenses, federal officials
will accept and act on state author
tiles recommendations.
Standards for solvency of state
banks are the same as for national
| banks.
Must Win Clean Bill
LII may Jake several Odyo w AC-
open either kind of banks, although
some probably will swing back their
doors on Monday. Banks so opened
will operate on a basis Of 100 per
cent Withdrawals on demand.
Despite queries by bankers, there
lis no indication whether, in the
near future, some banks may be al
lowed to do business on so or rs
per cent basis, as was resorted to
before the Presidents proclama-
ton. Apparently this question
awaits settlement.
1t is in this thorough examination
of national and state banks that the
instruments for renovation and re-
organization rest. No bank of any
kind can go back into business I'M
til its assets have been examined,
and it is given clean bill of health.
Some will go into the hands of
federal conservators created in the
new banking bill, and reopen after
careful inspection, while others
never may reopen.