Imperial Valley press., 1933-03-08
ABANDON PLAN
To USE SCRIP
CONTINUED From Page II

i III the nour on CRISIS, the admin
j stration. after fully canvassing the
/ field has fallen back chiefly on the
/ federal reserve act as its mainstay.
It was conceived for just SUCH
| times-when actual cash cannot be
obtained Basically the federal re-
serve system permits banks to take
| commercial paper, notes given by
/ business men in the course of max
ing wholesale purchases, and other
/ similar evidences of credit. and de-
post them with the federal reserve
bank of their district and obtain
/ paper money-federal reserve notes
Ban Gold Payments
/ The purpose was to permit banks
to get large amounts of paper
/ money when busines was heavy.
/ Then as they turn back the money
with the shrinkage of commercial
transactions the currency is allowed
/ TO contract.
That is a rough illustration and
! the actual process is infinitely
more complicated.
Officials are determined through
out to prevent payment of gold or
gold certificates.
! Sentiment among congressional
leaders Tor a limited bank guaran-
! tee continued though there was in
creaSlng uncertainty as to whether
they could surmount the difficult
ties and dangers involved.
More on this may be known after
President Roosevelt submits his
emergency message to congress to-
morrow.
Abandonment of the scrip plan
followed "a hour delay in pushing
the issuance of clearing house scrip
authorized in President RooSeyelt'S
midnight proclamation Sunday.
At the same time it was learned
President Roosevelt is prepared to
seek virtual oictatorial powers if
necessary to deal with the fast
changing banking situation.
Behind the sudden decision to
abandon scrip lie three major con-
siderationS.
l. Local scrip would be Of such
variety as to cause vast confusion
in actual business transactions.
2. 1t would amount to a form of
printing press money.
3. Banks still are boarding huge
sums of cash or assets which may
be converted into cash through the
federal reserve system.
WASHINGTON, March Cur
rency instead Of scrip will be used
to tide the nation over the present
/ banking emergency, Secretary of
| Treasury Woodin said today in
making announcement that no
scrip issues would be authorized.
1t was indicated at the same time
! that President Roosevelt is pre-
pared to assume dictatorial pow
ers in dealing with the situation if
no other solution appears feasible.
The currency necessary to pump
new vigor into channels of business
and trade is being loosened through
the II federal reserve banks, all
Of which have been instructed to
cooperate with member banks in
easing the situation.
Woodin, smiling and appearing
refreshed despite his long hours
of conferences, also sent a cheering
message to the nation when he
said:
I'VE see light here. Things aren't
going to pieces"
With the administration decision
to attempt q banking remedy
through currency instead of scrip
there was coupled word from sour
ces close to President Roosevelt that
he will demand that congress con-
Centrate on a banking program for
the immediate future and let a
complete rebuilding of banking reg
ulations go over until a compre-
hensive rebuilding of banking reg
ulationS can be formulated.
Woodin opened his conference by
saying:
Il am stunned in admiration at
the cooperation of people in this
country during this crisis.
1--WE see light here. Things aren't
going to pieces"
Praises People
Instructions sent to the New York
federal reserve bank last night had
been dispatched to the remaining
IL reserve banks, Woodin said.
Things are going WE'LL" declared
Woodin, "due to the aid of people
in all parts of the country"
Secretary Woodin did not indi-
cate when the currency to be is
sued would be ready. He said that
several days would be required to
whip into shape the program to re-
turn the nation to normalcy and
insure sound banking structure.
Woodin indicated that events of
the last 48 hours had convinced
the Roosevelt administration that
the use of scrip, clearing house
certificates, IOU's and other types
of paper was not the eXpedient
needed in the present situation.
Woodin's statements clearly indi-
Gated that the Roosevelt admin
istration is definitely, once and for
all, pledged to the program laid
down in President Roosevelt's in
augural address when he said
There must be sound but ade-
quate currency"