The Waterbury Democrat., 1933-04-13
REGENT PANIC LARGELY
 PSYCHOLOGICAL CURRENT
 ! ECONOMIC SURVEY SHOWS
Only Uncertainty, To-days is Not Concerned So Much With What The Final Outcome Will Be As to the Time It Will Take to Effect StabilizatOn

One of the most drastic and dramatic expedients since the cur
 rent depression began was en- forced when President Roosevelt ordered national banking holiday beginning March 6. Strangely enough, the wave of panic that spread throughout the country so rapidly when successive state gov ernments issued decrees for bank ing holidays seemed to subsidc shortly after the federal govern ment declared the national mora torium on banking operations. While the current crisis is of sufficient magnitude to require the full cooperation of every American citizen, it is the type of national occurrence that easily lends itself to exaggeration, states the current issue of The Guaranty Survey, published by the Guaranty Trust company of New York. Any view
 intimating that the need for a banking holiday was an indication that our financial structure had completely collapsed and that our recovery period will be indefinitely | prolonged by the moratorium con- stitutes a grossly overdraWn inter- pretation of the actual state of af- fairs.
 The transformation of this coun- try from an obscure European col ony in an undeveloped territory to one of the leading industrial na- tions of the world, with standard of living without parallel, could not have been accomplished in q little more than 8 century and a half without bringing economic maladjustments from time to time, The Survey continues The econ omic history of the United States includes several periods when ra- pid industrial growth was accom- panied by financial and business irregularities more severe than the current crisis. Yet these upheavals were always followed by changes in economic methods based on the lessons learned during diversity and by new eras of economic well-
 being that up to that time were
 unprecedented.
 Financial disorders in this coun- try, including the present one. have
 had in common q lack of conf1- dence leading to heavy withdraw- als, hoarding, and finally a restrlc- ton of withdrawals, especially in specie from interior banks, resort to representative money such as scrip (which represents sound bank assets), and efforts on the part of the government to bring | about a readjustment. These sim | ilarities suggest that if we have
 overcome financial difficulty in the
 past, we can overcome it in this
 instance. Without a doubt this is
 generally recognized by the Amer ican people, and the uncertainty
 that exists to-day is not so much
 concerned with the outcome as
 with the length of time that will
 be required to effect this inevit-
 able stabiliZation.
 The strongest indication that the
 readjustment is likely to be
 achieved shortly lies in the anom-
 alous fact that the run on the country's banks occurred at q time
 when we possessed about one-third of the worlds monetary gold and | the banking system as whole was in a technically sound position, de- spite the fact that weak units eX-
 isted here and there. Whereas fi-
 nancial panics in the past were
 based for the most part on actual
 financial weakness, the recent one
 was precipitated mostly by the
 human weakness of fear and doubt. When this fear was expelled by
 government action, many of those
 who had withdrawn their funds
 rushed to redeposit them as soon
 as the banks reopened. It may be
 doubted if our history furnishes us l with another example where mass \ psychology-heedless, self-exciting.
 and unreasoning-ha been so quickly dispelled by individual log
 ical thinking.
 l The federal government has
 adopted the policy of permitting
 only those banks to reopen which
 in its estimation are in a condition
 to remain open. If this policy Is
 complemented by a continuation of confidence and cooperation on
 the part of the people-and from | all indications this seems assured -the current financial disturbance