The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1938-04-15

d spending today.
! Losing no time in the Admin
istration'S ambitious campaign to
recapture prosperity, fiscal en-.
gineers Immediately set in motion
the mechanism for carrying out
the Presidents economic objec-
tives. Latest developments in the
new program include:
/. Huge credit initiation
through Treasury's release OF
sterilized gold.
2. Speeding of RFC loans to
railroads and industry.
3. SEC conferences to assist
small business in floating stocks
and bonds.
4. Studies looking to consoli-
dalton of bank regulation now
scattered between FD1C. the
Comptroller of the Currency
and the Federal Reserve Board.
5. Impending Federal Reserve
| Board action to increase idle
bank funds.
6. Plans for new Federal Dor
rowing to provide funds for
relief, PWA and other recovery
expenditures.
TREASURY MOVES SWIFTLY
Less than four hours after Presi-
dent RooSevelt's new recovery
plan was read to Congress, the
Treasury threw its entire $1,400,-
100000 stock of sterilized gold into
the nations credit structure.
This means the Government will
issue new currency against this
amount of metal. The gold origi.
nally was purchased with Dor
rowed money, and up to now the
Treasury had not used it as back
ing for new currency.
Release of this gold will increase
the amount of surplus cash in the
nations banks to $3,130,000, 900.
Another $3.50, 900, 900 will be added
within the next few days, when
the Federal Reserve Board au-
thorizes a reduction in the amount
Of capital the banks hold in re-
serve against deposits.
POTENTIAL 30 BILLIONS
These two moves, bringing sur.
plus bank funds to a record of
So. $50, 000, 900, will make available
for the nations industry and COM
merce a potential credit structure
Of 100000. 900. 900.
This is based on the theory that
under the new bank reserve regu-
lations soon to be effective, the idle
money in banks has a potential
credit expansion Of 10 times.
Under existing reserve require
ments, this potential credit eXpan-
sion is only about six times.
Meanwhile, the RFC reported
more than $70,000,000 had been
applied for by business men under
the renewed industrial lending
program. OF this amount. the cor
poration has approved about
SO, 900, 900. In addition, two sub
stantial loans to the Baltimore
and Ohio and the Lehigh Valley
railroads were granted.
In line with the Presidents so
licitude toward small business, the
SEC considered methods Of assist
ing in the financing operations Of
smaller commercial enterprises.
RICHER EXEMPTION STUDIED
One proposal under study would
exempt from registration require
mentS all firms seeking to float
5000 900 or less of securities. The
present exemption is fixed at $780,
600. An alternative plan entails
Government assistance to small
business firms in preparation Of
registration statements. Many
small units have complained OF
the high legal costs in preparing
these documents.
A general canvass of the Gov
ernment'S borrowing needs to Il.
nance the new recovery drive will
be made Wednesday at confer
ence between Secretary of the
Treasury Morgenthau and Federal
Reserve officials. Because OF the
money realized from desteriliza-
ton Of gold, only $1,712,000, 900
would be needed, said officials.