The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-08

The currency necessary to
pump new vigor into channels
of business and trade is being
loosened through the twelve
federal reserve banks, all of
which have been instructed to
cooperate with m e m Der
banks in easing the situation.
Woodin, smiling and appearing
refreshed, despite his long hours of
conferences, also sent cheering
message to the nation when he said:
I'VE see light here. Things
aren't going to pieces"
Defers Message Draft
With the administration decision
to attempt a banking remedy
through currency instead of scrip,
there was coupled word from
sources close to President Roosevelt
that he will demand that congress
concentrate on a banking program
for the immediate future and let a
complete rebuilding of banking
regulations go over until a compre-
henslve plan of legislation can be
formulated.
With congress reconvening Thurs
DAY, President Roosevelt is waiting
until the last moment to draft his
short, but direct message. Condi-
tons are changing hourly and de-
cislon may have to be suspended I'M
til almost noun Thursday.
The administration has decided
to rely for additional currency
chiefly on the regular elastic privi-
leges of the federal reserve system.
These are far from being stretched
to the limit and there still is room
for expansion to meet the current
shortage of cash.
Rigid Form of Expansion
This apparently can be considered
a rigid form Of currency expansion.
Officials are wary of labelling their
nour-to-hour moves during the
emergency.
Details of these latest moves are
trucking out slowly.
Best information is that the gov
eminent now contemplates addi-
tional currency chiefly of the kind
hitherto issued by federal reserve
banks.
Regular federal reserve notes al
ways have been issued against COM
mercial paper and the gold reserve.
There still is ample margin for in
creasing the volume of this paper
money by about $4,000 100000.
Maintains Gold Backing
In issuing these notes the federal
reserve system must maintain at
least 40 per cent of gold behind
them. Actually the gold backing
now is 81 per cent. Again there is
ample margin.
Federal reserve notes in actual
circulation on March totaled
So, $40 $4,000 The gold reserve was
50, 268 $4,000.
In the matter Of gold backing for
their notes, some reserve districts
naturally are in better shape than
others. It will be possible to shift
back and forth so that the support
ing gold will be sufficient in all
parts of the country.
Furthermore, the Glass Borah
rider to the home loan act may be
resorted to if need arises. This
bill allows banks to deposit govern
ment bonds with the treasury as
collateral for national bank notes.
At present s975. 0O0,0 900 more bank
notes could be issued under this
law.
Relies on Federal Reserve
In the hour Of crisis, the admin
istration, after fully canvassing the
field, has fallen back chiefly on the
federal reserve act as its mainstay.
1t was conceived for just such
times-when actual cash can not 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-fsderal reserve notes.
The purpose was 10 permit banks
to get amounts of paper money
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