Evening Star Newspaper, October 8, 1931, Page 5

"HOOVER PROPOSAL 'RECALLS 1907 PANIC Late J. P. Morgan Solved, Financial Crisis by Call- ing Conference. BEY MARK SULLIVAN, President Hoover's action to restore | the country's credit structure partakes, in part, of the kind ot leadership as- sumed by President Wilson in wartime, and, in part, the kind the late J. P. Morgan took to bring the panic of | 1907 to its extraordinarily rapid end. Some of the instrumentalities set up by President Hoover and some of his| technique are directly modeled on | ‘Woodrow Wilson's agencies. notably the | potential revival of the War Finance Corporation, which was begun by Pres- ident Wilson. | Some other portions of Mr. Hoover's program might properly have been in- itiated within the banking community. Substantially the entire work of end- ing the 1907 panic was taken on by the late J. P. Morgan, and the mere public spectzsfe of his summoning to his office e outstanding financial leaders of that day played a large psychological part in ending the panic. Theodore Roosevelt, who was President | adequate credit to the farmers as well py at that time, did not attempt to take URGES SPECIAL SESSION Senator Caraway Says Need Relief Before Too Late. HOT SPRINGS, Ark., October 8 (#). —Senator Caraway, Democrat, Arkan- | sas, sald today if President Hoover be- lieved his plan would be effective in reviving business he should call Con- gress into session at once instead of | waiting for the regular session, “when | the farmers' assets will be out of his ! hands and Congress will be working | for the gamblers.” The approach of cold weather neces- sitates action to curtail suffering, Sen- | ator Caraway said. FRAZIER ATTACKS GAMBLING INBANKS Farmers | Progressive Senator Says|n: Structure Must Be Revised to Meet Needs. Steps to solve the unemployment problem and revise the banking struc- | ture “in such a manner as will insure | & as business” were urged in a statement | THE EVENING STAR. WASHINGTON, MARKET WATCHED BY LEGSLATORS Fight for Ban on Short Sales Due if Prices Take New Sudden Drop. The New York Stock Exchange is under careful scrutiny today of leading | members of Congress. If there should be a new sudden drop in prices, and the drop should be attributable in some measure to short selling, there is every prospect of an immediate® renewal of the demand recently made by Senator Watson of Indiana and others that a ban on short selling—certainly for the ex!:dnt of the present depression—be ixed. ‘The market has reacted favorably to the proposal advanced by President Hoover for stabilization of banks and credit in this country. Should a reac- tion set in, however, with prices taking plunges to low levels, the probabilities are that the congressional leaders in Washington will be aroused. ‘The attitude of members of Congress toward short selling on the exchange s become more and more antagonistic n recent months. Arguments advanced supporters of the exchange that short selling has its proper place in the respensibility in ending the 1907 crists. | issued yesterday by Senator Frazier of Mmarket are being brushed aside by the Banking Leader Lacking. | It has turned out that in the present | depression no such outstanding leader- | ship as that of the late Mr. Morgan | was evolved within the present bank- | ing community. This lack of a clearly | dominant_ financial leader was one of | the conditions that put upon President Hoover the role he has taken. Mr. Hoover made out a nine-point Pprogram consisting of steps to be taken, | partly by bankers, and partly by the | Government. This program he placed North Dakota, Progressive Republican. “The gambling element in banking | must be eliminated.” Senator Frazier's | statement read. “The gambler in raw | foods and agricultural products must be outlawed. Gambling with industrial | securities mus be stopped. Our soclety | cannot stand the shock of continual stock market raids. The present depres- sion has vividly brought this to our at- tention.” Discussing the unemployment prob- | lem, Senator Frezier said he would co- legislators, who are convinced steps i should be taken to limit or eliminate entirely the selling of securities which are not possessed by the sellers. The only excuse for such trading is to make money out of the depreciation of values, they say. Manipulation of the market for such purposes must be stopped, they insist. Senator Vandenburg, Republican, of | Michigan, yesterday suggested that the New York Stock Exchange ban short selling for two months. Other mem- bers of Congress are prepared to go before a group of 15 New York bankers operate with other members of Cc¢n- | much further, not only favoring an’ in- a% & conference summoned by mim in| €7ess in introducing bills providing for | vestigation of the Stock Exchange by Washington Sunday night. evening of discussion with President Hoover, Secretary Mellon, Gov. Meyer of express motorways. “Such an express motorways system,” ‘After an | the construction of a national system a Congressional Committee, but also legislation to prohibit short selling. Some of the members of Congri of the Federal Re: ! the statement continued, “meeting not commented favorably today on steps s Treasuey” Ogdon Yast | only. the traffic problem of the cities, but taken by the exchange itself in recent and after a further conference of the also intercity express motorways con- days to regulate short selling. = in’ New Dection. can be planned, creaied and |fect & truce was on awalting further bankers among themselves In ef- York the following day, they agreed to | financed whenever we are ready to act, | developments in the market itself. the program, with immaterial modifica- | tions. One step, designed to help the and the whole job can be done without adding a single dollar to the present | Most of Chile’s rallways are State status of the railroad bonds, in which | expemitures which we are now paying | owned. savings bank funds are invested, was deferred for future action. | Indorsed by Leaders. | Some of the bankers, realizing the magnitude of the program,, and ex- amining it with the scrutiny any bank- | er must give to such a heavy commit- | ment, expressed at the end rather ex- alted admiration for the soundness of the plan, coupled with its comprehen- siveness. One financial leader, who happens to be a conspicuous Democrat, | after being made familiar with the plan, | indorsed it and in speaking of it em- | phasized the thoroughness with which . 1t met every existing condition, and the ltlullous foresight with which it took re of possibie new conditions that arise. & r. Hoover's first conference was with the bankers, because they hap- | pened to be close at hand in New York | and elsewhere. Meanwhile he had summoned to Washington the leaders and appropriate committee members of Congress of both parties. At the ear- liest moment after they could arrive, Mr. Hoover on Tuesday night presented his program to them. The discussion, lasting nearly three hours, was full and frank both be-, tween Mr. Hoover and the congressional leaders and between groups and indi- | viduals among the leaders. In the end | the plan was indorsed with slight modi- | fications and with some material reservations as to minor parts of the Yr m by a few of the congressional | ea ers. | Each Had Own Policy. | ‘That the leadership in this ecrisis | should come from Washington rather than from the banking community is due in part to the fact the financial would willingly fo:'>w. | | The great banks tended to follow each its own policy. This condition threw the burden of leadership out of the panic upon Washington, The fact has some elements of good fortune. because some of the steps needing to be taken as a loss, as a waste in actual cesh, machinery, time, injuries and death— | all the price we pay daily in the main- tenance of the motor traffic jam.” MORRISON TO SUPPORT HOOVER'S CREDIT PLANS North Carolina Senator Says He Is for “Anything to Bring Back Prosperity to America.” By the Associated Press, ASHEVILLE, N. C., October 8— Senator Cameron Morrison, Democrat, yesterday pledged full support of Presi- dent Hoover “in anything for bringing back prosperity to America.” In an address before a joint session of Asheville's civic organizations, hel sald: “Let us forget narrow party | groups and prayerfully seek the solu- tions of our difficulties as citizens of a free Government. This is no time for partisanship. Let us look for leader- ship in either party.” Senator Morrison stumped North Carolina against Hoover and for Alfred E. Smith in 1928, and was a leading figure in the movement which cast | Furnifold M. Simmons, the veteran North Carolina Senator, from the Dem- ocrat_councils for opposing Smith. are of a sort that depend upon popular participation and can best be led by a leader known to the whole of the country and all of fts groups and con- ceded by all to act in the interest of the Nation as a whole. | ‘The jmmediate major steps in the | program depend on the bankers and | pon Nation-wide mobilization of bank- | Upon this the bankers = o Sponsored by the Company of World Explorers, a society for the promotion | of friendship among the youth of all | nations. 27 London waltresses recently | toured Germany. — | At Last! Shoes that really fit the foot in motion! ROBINSON URGES EXTRA CONGRESS Democratic Senate Leader Wants Hoover Credit ~ Plan Enlarged. | By the Associated Press. An extra session of Congress to deal | with President Hoover's credit proposals | and other necessary economic legisla- | tion was advocated today by Senator | Robinson of Arkansas, the Democratic leader. The Senate minority leader said the President’s program was sound as far as it went, but suggested as supplement- al actions the provision of funds to al- low Federal and joint stock land banks to grant extensions of credit and the arrangement for renewal of 1931 crop loans to farmers. “It does seem to me,” Robinson said, “that the surest and quickest way to get decisions and to make plans effective is br assembling the Congress.” Rcoinson, in his first comment on | the Po»sident’s program, said the pro- posals for a $500,000,000 credit fund and | for expaasion of paper eligible for dis- | count at Federal Reserve banks “should | prove helpful and of permanent ad- | vantage.” “If, in addition, some feasible ar- | rangement can be entered into which will provide the necessary funds or | credit to enable both Federal and joint | stock land banks to grant reasonable | and necessary extensions to their bor- rowers who are under temporary dis- advantages due to the abnormally low | prices of farm products, conditions in the rural sections will be substantially | improved,” he said. “1 am also urging that a portion of the Government loans to assist farm- |ers in making crops during 1931 be |carried over so that something may | be avallable for the reduction of old |debts and for future requirements, but I can give no assurance that any plan | In this regard will be acceptable to the representatives of the Government. An opposite extra session view was expressed by Representative Snell of New York, one of the outstanding Re- p:lbncun contenders for the speaker- ship. Snell said in view of the short time | remaining before the opening of the regular session in December he could | not see any great advantage in calling ! an extra session. e — NRCH A Zn Foot Saver Shoes Foor saver Shoes achieve perfect fit—especially at ints, rch and heel . . the two essential . ending all oot-distress, FOOT SAVER'S pat- ented inbuilt construction conforms to the changing contours of the and alking” narrowest heel arch, “Pree FOOT lasts SAVER'S new it even the The “Diana” —of black or $12.50. We Believe in ELECTROL’S ECONOMY —and Endorse It! You may depend upon any statement we make for its sincerity and truthfulness. That's why we have Electrol, the ing the vears no hesitancy in recommending All-Electric Oil Burner. 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D. C., THURSDAY, | OCTOBER | 8, 1931. Proposals Win Favor Comment of Business Leaders From Al Parts of Country Voice Approval of Hoover Credit Plan. BY the Assoclated Press. Comment on President Hoover's six- point propcsal for the extension of credit was widespread and came from leaders from all parts of the Nation. Meany of the statements follow: Alfred E. Smith, who opposed Hoover in the 1928 presidential election—Un- doubtedly President Hoover's plan to aid the banks and the Federal Farm Loan System is helpful in this crisis. Increased credit will aid in the neces- sary process of re-establishing confi- dence and checking liquidaticn. At the same time it may be hoped it will ease the banking situation throughout the country and thus make itself felt in the general economic situation. Willlam Green, president of the American Federation of Labor—The pro- gram is a constructive lt!rA It will have a profound and helpful effect. It will tend to create confidence, particu- larly in the banks. The indirect effect is bound to be helpful in the employ- ment or unempl-yment situation.” Alfred P. Sloan, jr., president of the BUSINESS STATUS BLAMED ON G. 0. P. By the Associated Press. GAINESVILLE, Ga, October 8.— Senator Walter F. George of Georgia todey blamed a “serles of irresponsible human acts, policies and practices of Government” for the depression and attributed to the Washington admin- istration during the past 10 years the major share of responsibility for con- ditions. “Business depressions do not produce themselves,” Senator George told the Georgia Convention of Kiwanis Clubs here. He said that with the inaugura- tion of President Harding “the business interests of this country assumed com- plete control of the affairs of govern- ment. ‘The industrial, commercial financial—in a word, the corporate in- terests of America—converged in the person of Andrew W. Mellon, the Sec- retary of the Treasury. General Motors Corporation—I am con- vinced that the plan of the President is highly constructive. It will mcbilize our | inancial resources and enable them to be used where they will do the most deal with ‘each problem with definite kncwledge of its necessities. It should in a considerable measure serve to al- lay the unreasonable and unjustified hysteria that prevails, which only serves to prelong the present situation and the return of economic recovery. Samuel McRoberts, chairman, Chat- ham Phenix National Bank & Trust Co.—It (the plan) will marshal re- sources of the country in a central in- stitution which will make available to localities, where necessary, assistance which will do much toward a revival of confidence and stability. It is workable and need not entail losses upon any individual or institution. Hai C. Knight, president of the New England Council and the Southern New England Telephone Co.— President Hoover's plan would go far in increas- |ing public confidence in the financial | integrity of America and would un- | doubtedly have a far-reaching and | beneficial effect on world affairs. | Charles S. Mott, banker and vice | president of General Motors Corpora- | tion—The country is w0 be congratu- | good under guidance of those who can | provisions of the Federal Reserve Bank act and <he increase in capital stock of Federal Land Banks. ‘Edwin R. A. Seligman, professor of economics at Columbia University—The action taken by President Hoover is wholly admirable. It will serve to mo- bilize and revivify the scattered eno- nomic and financial forces, which are at present in a state of inanition. Our resources are so enormous that there ought to be no doubt of our ability to weather the storm. Arthur M. Reynolds, chairman of the ‘b_l'i of the Continental Illinois Bank | & Trust Co., Chicago’s largest bank— |We have no details, and it is almost |impassible to discuss such a matter on partial information. Fred W. Slrfiml. president of the Chicago & Nortliwestern Railroad—Mr. |Hoover's plan is very eonstructive. I expect it to prove benefi*ial to industry all over the country. T. G. Lee, president of Armour & Co.—The Presidgnt's plan should bring relief in many ways and should go a long way toward restoring confidence. Willlam Wrigley, jr.—Splendid! We have everything we need in this coun- try—money, raw materials, workers, ability—all but confidence. Mr. Hoo- ver's suggestion has given the people confidence, and that’s all we need to pull out of this depression. E. F. Swinney, Kansas City, chairman of the First National Bank—At first thought I am not at all impressed with the proposition. This from my belief that if we could leave the country slone and stop tinkering with every- | thing pertaining to business, we would |be a darned sight better off. Lynn P. Talley, San Francisco, chair- man of the Board of Directors of the Bank of America—There is every rea- | son to believe confidently that it will | result in great good and progressive sta- bility in the present instance. Walter W. Smith, president of the come to the smaller banks esrlier, as it should have, many of them, would not now be closed. # John K. Otley, president of the National Bank of Atianta and a mem- ber of the Advisory Couneil of eral Reserve System—I cordially indorse the President’s proposal for an emer- gency credit corporation somewhat along the lines Finance Corporation. Henry Blun, chairman of irectors of nnah, Ga.—The pro- 208l of President Hoover to broaden the Federal Reserve act makes discount pa will provi banks. Gov. Wilber M. Brucker of Michi- gan—The President’s plan is a gigantic stride in the direction of stabilizing busi- ness and toward general recovery. William J. McAneeny, president Hud- son Motor Car Co. of Detroit—President Hoover's finance proposal has unlimited ibilities for the restoration of lic confidence and the building up of & solid foundation for the return to economic stability of all industry. Gov. Wilbur L. Cross of Conneetient —1 believe President Hoover proposes inflation of currency, although he does not use the word inflation. If we ean keep that within bounds it will help us. We can do that by making the assets of a bank and other financial institu- tions more liquid. * * * oOur legis- lators would do much if they would follow the advice of the economists and drop politics altogether. Senator William J. Harris of Georgia | =On the surface the plan looks to be | all right. I haven't had time to make an examination of it in any detall, but | I have hopes that it will help agrieul- | ture and business generally. If I find | that to be the case, I shall favor it. | Senator Walter F. of Georgia ‘D—“P‘rem reports of the President’s pro- | 1ated that President Hoover has scen fit | First. National Bank, St. Louls, and a | bomene, CTtIrelY 00 meager to justity to make this proposal. thoroughly practical and will furnish much relief in our present situation. I trust it will be worked out in a con- servative manner, 80 't will give needed relief, with proper safeguards against its abuse. Charles G. Dawes. United States Am- bassador to Great Britain —The Presi- dent’s plan came at an opportune time when under the natural laws a reaction in the mass attitude from the extreme pessimism of the last two years is due. The psychological effects on business may be temporary when their cause | proves unfounded, but consummation of the plan with its consequent massing of the reserve strength of our enormously strong but scattered banking system will give an enduring basis for a justi- fied revival of confidence. Edward A. O'Neal, president of the American Farm Bureau Federation— President Hoover's efforts forecast some definite ald to agriculture, especially in his proposal to broaden the eligibility ONLY $9°75 CASH for this **Scottie® PAYMENTS ON LIGHT BILLS Here is one of the lat- est electric clocks of a reliable manufacturer. This unique clock called “Scottie” comes in deli- cate cases of peach, green and ivory ... just the thing for the boudoir. A fascinating Scottie moves gently around a “float- ing” seconds disc to point out the seconds! Only $9.75 cash buys this Scottie clock. Truly a bargain in a quality elec- tric clock. 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Nutt, chairman of the board of the Union Trust Co., Cleveland, and national treasurer of the Republican Party—President Hoover's proposal should bring the solution of the bank- | ing problem facing many, particularly i'h' smaller banks of the country. For- | mation of the $500,000,000 banking insti- tution or pool and the eventual liberal | 1zation of the Federal Reserve laws will | mean real estate loans, particularly, can be disposed of by the banks and frozen assets liquidated. If the support Representative R. S. Aldrich, Repub- | lican, Rhode Isiand—I believe th?:h! | statement issued by President Hoover | should completely restore the confidence | of the people in the banking system. The President’s brilliant and construe. | tive plan will permit banks to main- tain a more liquid position without sacrificing their assets. 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