Evening star., 1933-02-28

again, private business must have nor
mally functioning bank resources.
Third: Most Of our normal business
Is done in credits and clearances, and
not in actual currency. For example,
total American clearances in 1929 were
713 billion dollars. while our maximum
currency supply was less than five bill
lions In other words, our money
problem" is less problem in volume Of
currency than in the velocity of its
turnover in normal trade and nor
mally functioning banking.
Thus, this banking function is found
at the base of every economic contem-
plation. Therefore. since public conf
dence Is the indispensable key to nor
NAL banking. our most far-reaching
challenge Is the creation and mainte-
nance of justified and enduring conf
dence in this behalf. Successfully es-
tablished, other recuperative blessings
will follow as day follows night.
OF course, confidence" has many
facets. It never can be divorced from
collateral influence like confidence in
the stability and sanity and solvency Of
Observation-Disclosures In the integ-
rity of money-confidence in the valid
ity Of contracts. These factors are ig-
nored at OUT peril. The mere sugges-
ardy. They defy any panacean substi-
tutes. I am happy to state my own
conviction that Congress will desert
none of these dependable foundations.
Confidence Must Underly.
But underlying everything must be
mass confidence in the institution OF
banking itself. This confidence must be
| a justified reality-the substance, not
the shadow The existing virtues Of
banking must be emphasized. The
weaknesses must be corrected. The
public character of banking response
bilities must be acknowledged more
than ever in behalf Of the depositor.
Here is the key to our whole situation,
because he is democracy's greatest cap
italist. If Congress successfully legis-
lates with him in mind. it will serve
all these pyramiding advantages to
which I adverted in the beginning OF
this discussion.
! One aid to this end would be con-
currence by the House OF Representa-
tives in the so-called Glass banking
bill which is sponsored by the distin-
guished Virginian, who Is the highest
American legislative authority upon this
subject. Thus would We progressively
improve the banking structure and
contribute to the confidence for which
we strive. Thus would we substantially
divorce bank resources and stock specu-
lation. We would separate investment
banking and commercial banking. We
would increase the scrutiny Of public
control. We would facilitate speedier
liquidation dividends in the. unhappy
event of bank cloSings. We would sane
tion Statewide branch banking by per-
nit of each State itself-thus offering
at least two new and vitality useful
services. namely. adequate banking ia
cilities for otherwise bankless communi-
ties, and the opportunity OF banking
consultations as a successful prevent
i've Of banking failures. All Of these
considerations trend toward banking
health and American happiness.
But my particular proposition to-
night is that this healthy banking
should be. like any other healthy per-
son, eligible for insurance, and that this
insurance under appropriate limita-
tions should be warranted by the Gov
ernment of the United States as a
matter of sound public policy and as a
final invitation to our unadulterated
confidence I shall submit that this in
surance, If feasible, can become the
surest means to accomplish all of these
detectives which we have been discuss
ing-to end boarding, release currency,
relax and multiply credit, stabilize
trade, facilitate new business. build mo-
rale, and break the vicious circle from
which We would escape. I hasten to