Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-03-08
Reserve Notes
May Replace
Scrip Issue.
WILL KEEP GOLD
NU. S.CUARDED
Broader Powers for
President Are
Expected.

President Roosevelt will keep q
firm hand on the national bank
ing and monetary situation in
this country until conditions have
Strengthened. out and permanent
remedial legislation can be en-
acted into law.
Another presidential proclama-
ton dealing with the situation
may be expected either before the
present bank holiday closes at
midnight tomorrow, or simultane
ously with the end Of the holiday.
Scrip May Be Avoided.
The President is inclined to the view
that the general use OF scrip for cur
rency the country over Will not De
necessary, but that widespread use
Of Federal Reserve notes, for which
additional power will be asked Of Con-
gress. will take care of the situation
Scrip, however, may be needed IN Ger
tain localities to meet the existing
emergency.
In his message to the new Congress
which assemblies at noon tomorrow, the
President will ask broad powers be
granted him to make 1t possible to
meet changing conditions.
His recommendations for legislation
will deal with the present emergency,
leaving for further consideration per-
manent reforms in the banking laws.
The present plan appears to be TO
have Congress act speedily on the
emergency legislative program, ana
then to recess for two or three weeks,
thus giving the administration time to
formulate its permanent legislative
program. The President will confer
with the congressional leaders today
to determine what course shall be fol-
lowed.
Will Protect Gold.
The President in his recommenda-
lions to the Congress tomorrow Will, 1t
is understood, deal with one or two
other subjects beside emergency bank
ing legislation What these are has not
yet been disclosed.
The President, 1t Is clearly apparent,
will act to keep the gold supply safe
In this country. Whatever modlnca-
lions by the President and orders by
the Secretary of the Treasury, this
maintenance of the gold supply Is ex-
pected to be firmly continued.
The views of the President IN regard
to the banking situation and to the
recommendations he will make to the
Congress were obtained today at the
first press conference which the new
Chief Executive has held since he en-
tered the White House.
No intimation was given OF the de-
tails of the expected presidential proc
lamation relating to banking. How
ever, it is not believed that 1t VIII con.
tinue the present bank holiday, Dut
will call for restricted banking, bearing
in mind always the need for conserving
the gold supply.
Will Guard Credit.
Owing to rapidly changing conditions
and to the brief period before the as
sembling of the Congress, 1t will be I'M
possible to draft program OF per-
manent banking legislation for presen-
tation in the Presidents first message
to that body tomorrow.
It was pointed out today. as an ex-
ample of the speed with which the sltu.
alton is changing. that on Monday II
seemed inevitable that there should be q
national use of scrip as medium OF
exchange. but now it is believed that us
use NAV be avoided generally II not al
together IT,. l..
One thing appears certain, that IN
dealing with the banking situation there
must be the same treatment meted out
to the national and State banks.
Every effort is to be made by the new
administration to preserve the credit o!
the Government. While it Is essential
that a sufficient supply OF currency, or
what passes for currency. must De pro-
vided to make it possible for the coun-
try to do business and the people 10
care for their needs, there Is 10 De MANI
tanned sound as well as adequate cur
rency. :.
In line with this determination Is
the effort which will be made by the
roosevelt administration to bring about
economy and to keep the Government
out of further debt. In the end TINS
must be accomplished by balancing
of the budget, with, it is believed,
greatly reduced expenditures.
Guaranty Favored.
On Capitol Hill there has been an
increasing demand for some form OF
Government guaranty of bank deposits.
Senator Pat Harrison OF MISSISSIPPI,
slated to be chairman Of the Senate
Finance Commute, personally favors
such guaranty. Senator Fletcher OF
Florida. soon to be chairman OF the
Banking and Currency Committee, looks
with some favor on measures to assure
deposits. through levy on deposits and
loans. Senator Reed of Pennsylvania
has indicated that he would not oppose
a Government guaranty OF deposlts up
to SO per cent. In all cases the Sen
ators insist that the guarantee must De
made only in cases where banks are
strictly solvent and with liquid assets:
So far. however, there has been MOTH
ing to indicate that these demands Ior
Government guaranty Of bank deposits
has impressed President Roosevelt Win
the soundness of such course.
Senator Robinson of Arkansas, the
Democratic leader, said he believed the
snecial session could dispose OF Presl-
dent Roosevelt's emergency banking
program in three days and that there
would be perfect corporation" between
Senate and House in obtaining us
adoption. l
Senator Harrison has declared him
self in favor of big tax on the
hoarders of gold and currency at this
time. Just how such tax could be
made effective has not been worked out.
There is a growing belief, however, that
some such legislation may be attempted:
Meanwhile Secretary Woodin said that
acual currency would be circulated IN
nlace of erin or clearing house cert1n-