Evening Star Newspaper, March 8, 1933, Page 5

BOND LEGISLATION IS HELD NECESSITY Action by Congress Regarded Just as Imperative as New Bank Laws. BY MARK SULLIVAN. ‘That the strictly banking part of the situation should mcnopolize attention now is natural. The arrangements for use of scrip and for the opening of banks are going forward with great speed and along lincs universally re- | garded as good. Equally imperative, however, and de- manding almost equal speed, is acticn having to do with Government bonds. | ‘The matter of bonds will become acute on March 15, when the Government will be called upon to pay or refund $694,000,000 of maturing notes. In order to make that possible, legis- lation looking to the safety of Govern- | ment bonds will be as necessary when Congress meets tomorrow as legislation looking to the opening of banks. The particular legislation which it will be necessary for Congress to enact will be legislation reducing Government ex- penditures. perative that Congress. after long avoid- ance, will be obliged to act om the mat- ter of reducing veterans’ compensation.’ Developments about Government bonds had as much to do with bringing on the crisis as developments about banking. To single out from the tan- gled chain any one cause for what has happened can never be more than a | Joose approach to accuracy. Background Traced. A tenable statement might say that about last December, when Congress met, the financial centers of Europe as ‘well as financial minds in America be- gan to watch closely whether Congress would be willing te take the steps neces- sary to reduce Government expenditures 10 & point within its income. They ob- served that President Hoover recom- mended many reductions, among them & reduction of $127,000,000 in veterans’ compensation. They observed thet Con- gress ignored the recommendation and anade not even a gesture toward reduc- tion. They observed, in sum, that Con- gress continued to permit the Govern- ment to pile up a deficit at the rate of some $7,000,000 a day. They observed that, to meet the deficit, the Govern- ment was borrowing more and more, mnd they realized that the interest on the borrowings would yet further in- crease the deficit. Specifically, it seems im- | THE EVENING STAR, WASHINGTON, D. C., WEDNESDAY, MARCH 8, 193 Bank Situation at a Glance By the Assoclated Press. Secretary Woodin of the Treasury eliminated the question of scrip to ease the national bank situation today by an announcement that a’plan was being formulated to circulate actual currency. Backed by a Treasury Department order reopening Federal Reserve banks for limited transactions with members, financial institutions in many localities resumed business today on a restricted basis. In some instances these activities still consisied merely of making change and repdering other small services, but in other cases advantage was taken of all 13 regulations laid down by Secretary Woodin of the Treasury and deposits end withdrawals for necessities were allowed. Announcement was made that President Roosevelt intends to continue his command of the monetary situation until permanent legislation is possible and that a new proclamation is due on Thursday night, when (> present national holiday ends. T his message to the speclal session of Congress on Thursday Mr. Roosevelt is expected to ask for broad powers to meet the situation. From high quarters of the British government it was learned the situation in | America in no way affected Great Britain’s policy with regard to the gold stand- | ard, no return to the standard being contemplated at this time, Canadian markets remained firm. Representatives of the principal graln exchanges asked for modification of the banking rules to permit immediate reopening of their markets for both cash and futures trading. The wholesale price of fresh pork dropped in Chicago. In many States wide banking powers were given either to Governors or to bank superintendents. | Bartering increased. SITH HEADS UNIT - CUBA GETS MONEY FORTSSUING SCRIP. T REOPEN BANKS Awaits |$15,000,000 From Atlanta Former Governor | | Reserve Institution to Reach Havana Today. | Washington Action Before | Approving Certificates. | By the Associated Press. | NEW YORK, March 8—Alfred E.| | Smith’s hand was at the controls today | as brand-new machinery for providing | the people of New York State with scrip got 1eady to hum. There was no definite indication, | reopening, set for tomorrow. however, as to when the command “go” 2 ! would be given or whether it would be | The secretary made the announce- ‘g“in at all. ’rhe;e L;' a p;o\'ll.{sostht:t‘ ment after a telephone conversation | makes the plans for New York State| with the governor of the Federal Re- | dependent on what action President | s Tency for the Nation. | chado on Sunday decreed a banking | Jshman Picks Smith. b | holizay until Thursday morning. Gov. Herbert H. Lehman, newly made | | dictator of New York banks, named $6,000,000 Already Received. Over ani above its usual daily re- | Smith as chairman of the Emergency | Certificate ~ Corporation last night | ceipts to keep cash on hand at around | e A = e - | eral erve up unt lay had recejve: ganization, under sirict State control, | o additional six millions. The Teceipts expected tocay will raise its supplies, | would issue certificates against the | | scund assets of banks. | according to unofficial estimates, to around $30,000,000. ‘The scrip would not conflict with that | Branches of American banks (includ- By the Associated Press. HAVANA, March 8.—Secretary of State Ferrara announced that $15,000,- 000 would reach Cuba today to bulwark reserves of local banks against their | docks to allow the release of commodi- | several thousand bushels of potatoes, Observing all that, the financial cen- | planned by the clearing house associa- ing the Natlonal City and the Chase | | tions, Lehman said. It would serve sec- ters of Europe and many persons in | tions and people that the clearing house | Natjonal), had received another seven America_cancluded, to put it bluntly, | STip would be inadequate to serve, in that Congress was going to permit the | his opinion. Government to fall into a position in | Lehman announced that besides which it was becoming doubtful whether | Smith other incorporators and directors the Government could pay the bonds it | ©f the new corporation would be: For- ‘was issuing. | mer Gov. Nathan L. Miller, Lincoln In this state of mind, speculators in | Cromwell, acting president of the Mer- Europe began to sell dollars and banks | chants’ Association of New York City; and individuals in America began to|Jerome D. Barnum, publisher of the | sell Government bonds. This condition, | Syracuse Post-Standard, and Robert as much as any other, was fundamental | Jackson, Jamestown attorney. in causing what happened. From this | Wait Wachington Action. flowed the bank closings, the hoarding | o cov oS ol e £ 2 ight of gold. It w: o e G et o Ol ot %25 | round of conferences at his home, said | Michigan holiday started the cards fall- | the State scrip would not go into cir- | millions from their head offices before President Roosevelt placed an embargo | on gold expartations. | No official action was announced on | the Associated Merchants’ request that President Machado extend the banking moratorium to cover all commercial | obligations falling due in the holiday | period. Bankers pointed out that the | moratorium, in effect, exists, since no | creditor is pressing for payment. | Public in Good Humor. | While government spokesmen reiter- | ated their confidence in the American | banking system, the public appeared to ing, that Bernard M. Baruch testified prophetically before a Secnate commit- tee that “delay in balancing the bud- get is trifiing with disaster. The sus- n s growing that we do not really intend to balance it.” Interest Charge Advances. The index of what happened between inber and February i to be found rates of interest. In December, Government was able to borrow tw est rate of one-eighth of 1 per cent a year. borrowing $75,000,000 for 91 days, was © obliged to pay a rate of 4.26 per cent. ‘The difference was caused largely by the fact Congress was coming to an end without taking steps to keep the Government's expeditures below its income. Looking forward, the immediate con- dition is that the Government has $694,000,000 of short-term notes due for payment next Wednesday. In that situation it is imperative that Congress, when ft meets tomorrow, must take the step which will overcome its long neg- Ject, and show the world the Govern- ment is going to keep within its income. It would seem that legislation reduc- ing veterans’ compensation and bring- ing about other economies is as neces- sary as legislation about banking. Vet- erans’ compensation is only one item, but is the largest item in which reduction can be made. Action upon veterans' compensation is further made necessary by President Hoover's pocket veto dur- ing the closing days, of the bill in which Congress, against Mr. Hoover’s recom- ehort-term money at the nominal inter- | Last week the Government, in | culation before Friday at the eagliest. | "“It takes some time to engrave and print | scrip,” he said. “Monday night's permit from the Treasury Department was sub- | ject to revocation if a national plan | | was agreed upon and we will not gol | ahead with printing until we get final | authorlty from Washington be taking the closing of the banks in | increasing good humor. | Tourists are finding it possible to | cash travelers’ checks, while hotels and ‘ other establishments are extending credit and limited cash. Checks against deposits in the closed institutions are accepted quite freel: {STATE SILVER COINAGE To reduce living costs Manaco is ne~! gotiating with Italy for foodstuffs. FOOD LADING BILLS HONORED BY BANKS Perishable Produce ; Con- tinues to Move Across D. C. Markets. Perishable produce shipped through the medium of bills of lading continued | to move across the Washington market today as local banks honored drafts covering bills of lading relating to food shipments, in Mne with the orders is- sued by Secretary of the Treasury ‘Woodin regarding food and feed. Meanwhile, however, the prospect of a dearth of fresh supplies from the produce areas of nearby Maryland and Virginia loomed as a possibility, with “haulers” bearing lesser quantities to the city’s markets, due tc a lack of ready cash. Ready for Drafts. ‘Washington banks assured commis- sion merchants add other dealers in fresh food that they stood ready to handle drafts attached to bills of lad- ing for shipment of this type of mer- chandise. The accommodation, how- ever, was absolutely restricted to eat- ables, and no funds were released for | any other purpose. In some ‘;ns!nnces the banks notified consignees of receipt of drafts, and in cases where account balances covered the amount named the transactions were allowed to proceed. Railroads, also, were accepting checks in payment for bills of lading and freight charges. Merchants in the various markets re- | ported that hucksters bringing in pro- duce from farms in nearby States have in several instances found themselves unable to function without ready cash. The danger of a real crisis, for the pres- ent at least, was belittled by commodity merchants questioned today. The only sufferers at present, they said, are the producers themselves. Distributors here reported that ship- pers and growers have bcen insisting upon cash at the source, and they pointed out that a shortage may develop if the present situation continues for many more days. Cash at Docks. In the cases of freight by boat, usu- aliy arriving in Baltimore en route to ‘Washington, local merchants have been compelled to be ready with cash at the ties. One instance was reported of | headed for District markets, which was tied up because of a lack of cash. As Washington went into the third day of the banking holiday proclaimed | President Roosevelt, and the fifth | day of closed financial houses, due to the Inaugural day holiday and Sunday, | local retailers continued to report a steady flow of business. In some quar- | ters, a slowing up was reported, but in | the main merchants said there ap-| peared to be normal demands on their businesses. Business Not Altered. | The emergency situation has not | forced any of the larger retail concerns to alter their customary business poli- | cies, and cash methods of doing busi- ness continued in force at the chain grocery stores and drug stores. Theaters did a normal rainy day busi- ness yesterday, it was reported, and | restaurants, some of which adopted credit policies, enjoyed customary trade. ‘ e Dancing at 83. At 83, George W. Jencks' favorite | recreation is dancing. At his birthday anniversary party in West Tisbury, Mass., he outdanced many of the young- | er guests. Hungry Salesman Eats His Samples When Cash Runs Out By the Associated Press. JACKSON, Tenn., March 8— :IJ.‘ A, Howard was hungry, and gusted. In his pocket was a fat check from the Chicago Packing Co. for which he travels, but in quick assets it wasn't worth a ham- burger because of the banking restrictions. In desperation, Howard turned his truck toward Jackson, where he has friends. Then a golden idea struck him. Into “the k of the truck he went and ate his samples, AUSTRIAN DIGTATOR HALTS UNION PLAN Agitation for Joining Reich Blocked by Dollfuss Measures. By the Associated Press. VIENNA, Austria, March 8—The “Anschluss” movement for a union of Germany and Austria, spurred by Chancellor Hitler’s electoral victory in Germany, bumped up against the stone wall of an Austrian distatorship today. Chancellor Engelbert Dollfuss as- sumed the powers of dictator upon the invitation of President Wilhelm Miklas, who refused {o accept the resgnation of the Dollfuss cabinet. A rigid censorship was ordered and political demonstrations of all kinds ruthless maintenance of public peace Demonstrations Held. ‘The action was believed aimed at the enthusiastic demonstrations throughout the country Monday night, celebrating the Hitler victory and urging the “Anschluss.” Alfred Frauenfeid, leader of the Hitlerites, had made a threat to seek power by force unless elections | re permitted. The Austrian Parliament had been unable to function since the resigna- tion Saturday night of its officers, who had sole power to call it in session. Chancellor Dollfuss’ Christian Social Catholic) party, which lacked a clear majority in Parliament, has been only luke-warm on the subject of “Ansch- luss,” which Hitlerites ardently ad- vocate. But when France and England re- cently associated themselves with the little entente—Czechoslovakia, Rumania and Yugoslavia—in protesting the | Italian arms shipment to Austria, the | ¥ Christian Social party darkly hinted in its official newspaper that a policy of trying to brow-beat Austria could only result in forcing her to turn to Germany. Joint Move Spurs Talk. The reorganization of the little entente, former possessions of the Austro-Hungarian Empire, also spurred the “Anschluss” movement. The Socialist party, dominant in Vienna, though weak elsewhere, strongly | opposes union with Germany and at- tacked the Christian Social party titude as an attempt to frighten France. Pensions are to be taxed in Belgium during 1933. PROPOSED FOR IDAHO Inspector of Mines Suggests New | Issue to Meet Emergency Need for Cash. By the Associated Press. | BOISE, Idzho, March 8—W. H. Simons, State inspector of mines, has proposed that the State issue silver | coins of one ounce weight and valued | just at the market price of silver. | He said it would put a new currency |into circulation, readily redeemable at | | face value, and would not seriously | | obligate the State, since its repayment | §| would be automatic through sale of the ilver. 1] [GUATEMALA HAS HOLIDAY% EBanking Suspended Pending Out-; | | come of Crisis in U. S. GUATEMALA CITY, Mareh 8 (#)— | The government yesterdsy ordered the || Why did you buy this ‘NEWSPAPER? SUPPOSING that, beginning tomorrow, all the news- =1 BACK RODSEVELT, EOVERNORS' PLEA Proclamations Issued in Ac- cordance With Conference Resolution. e Governors of a number of States to- day issued proclamations calling upon the people to unite wholeheartedly be- hind President Roosevelt for the good of the Nation, in accordance with a reso- lution adopted by the Governors’ con- ference here Monday after it was sub- mitted by a non-partisan committee headed by Rear Admiral Richard E. Byrd. The resolution submitted by the com- mittee, which includes Alfred E. Bmlth‘l‘ Newton D. Baker, William Green and Dr. Nicholas Murray Butler, follows: “‘We respectfully submit to your con- sideration that the dire need of the hour calls for national unity in support of our President—a unity even more complete and unselfish than that neces- sary in war. Responsibilities Cited. “Our President has responsibilities as grave as have ever facad a great leader in our history. His is the task of re- establishing our national faith in our ability to go forward, under God, with the march of democracy. “We respectfully ceclare that the people must share with their leader this great responsibility. “We, the undersigned, have cast aside politics and group and sectional inter- est in a spirit of co-operation with the President, and we believe that this same spirit animates our whole people. Be- yond that we are convinced that there is throughout the Nation a spontane- ous spiritual uprising of confidence and | hope in our chosen leader. The nature | of our national crises calls for an ex- | pression of this confidence in the com- | were banned. The chancellor promised | Pined voice of the people to show that | re_establich: they are behind him, alert sud vocal “Prompt and decisive action of a na- tional scope, and in several directions, is necessary to prevent economic col- lapse throughout the land. The ordi- nary operations of Government that prevail and are suitable in time of pros- with normal concitions may be to meet adequately this ema=- gency and avoid the danger of this economic avalanche carrying all be- fore it. Asks Governors to Join, “We, a coalition committee of differ- ent groups and political and religious faiths, respect‘ully request that you join the other Governors of our country in | the issuance of a proclamation on Wednesday, March 8, 1933, in support of the President of the United States and our institutions, thus enabling the whole people to deciare in unison their conficence and faith in our President. This would constitute the people’s ap- peal to the patriotism of Congress which ve know they possess, in common with support of the President in the present crisis a nonpartisan committee repre- sentative of religlon, labor, agriculture, commerce, the press and other ele- ments of the Nation have petitioned the Governors of the States by proela mation on March 8 to summon their fellow citizens to your support. “The response of the Governors has been complete. Proclamations will g.vsuehthm:ghm;‘t the States tomorrow. e have the honor to report to you this action of the Governors as in- other evidence of the will of the Nation to overcome every obstacle in the cnward march cf our civilization under your leadership. “Respectfuily, President A. F. of L. B. B. MOEUR, Governor of , Arizna. By Mrs. John C. Greenway. C. D. BUCK, , Governor of Delaware. CLYDE L. HERRIN( Governor of Iow ISSUES PROCLAMATION. Murray Asks Oklahoma to Back Roosevelt. OKLAHOMA CITY, March 8 (#).—! Gov. Willlam H. Murray last night is- sued a proclamation urging the people of Oklahoma “io be patient and stead- fast in a co-operative spirit behind the new President, his excellency, Franklin D. Roosevelt.” CALLS ON ILLINOIS. Gov. Horner Asks Support for Prui-: dent Roosevelt. | SPRINGFIELD, Ill, March 8 (@.— | Gov. Horner today issued & proclama- | | tion calling on the citizens of Tllinois to | unite in whole-heartedly supporting “the | President in his efforts to protect our | Nation from the serious consequences of | | further economic disturbance.” | The proclamation said, in part: | “The situation demands of each and | | every one of us the fullest measure of | co-operation with cur President in his | stupendous task of restoring our economic balance, our happiness and | | prosperity. | “Our President has responsibilities as | grave as have ever faced a great leader | in our hictory. His is the task of | ing cur national faith in| and united in heart. i°‘" PRIy g0 Orwardh The eople | must share with him this great respon- | sibility.” — | PLUMBER DIES | | John W. Hurley Passes Away After Long Illness. John W. Hurley, & plumber here for many years, died this afternoon at his homay, 1219 Geranium street, after a long $llness. Mr. Hurley, one of the | | cuzy;d.‘m enthusiastic fishermen, con- | du lumbing business on D street. | He is survived by three sons, John | W.. who operates & hotel at Colonial Beach, Harry N. and Walter, and a| daughter, Mrs. Charles M. Schneider. Road deaths in England last year were fewer than in 193 UNITED STUCCO PROCESS all, to co-operafe with the President in taking such action as will guarentee economic stability, restore confid nce | and thereby relieve unemployment and | widespread distress ! After the Governors’ conference had ! adopted the resolution, Admiral Byrd | called at the White House to report on | the action, submitting the following | letter: “My dear Mr. President: “Moved by a deep conviction of the vital necessity of national unity in the = mendation, kept veterans’ compensation | syspension of banking operations as a Where it had been before. safeguard for national finances pend- 7 Llng solution of the situation in the More than 1,000 summonses haye | United States. The government em- been issued in Hampstead, England, | phasized that banks,in Guatemala are this year for non-payment of taxes. | completely solvent. Makes milk drinking doubly enjoyable TRY a quart of Embassy Pasteurized Milk. Drink and taste it. See how the Cream is rich enough to WHIP. Put it to every test you hknow. If it fails to make you want Embassy Milk refund your money immediately without question! Pledged to Please You, or No Charge! 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HOLLYWOOD, Calif, March 8— Cessation of all activities at all fotion picture studios in Hollywood was ordered early today by the Association of Motion Picture Producers unless drastic cuts in salaries and wages for an eight-week period, due to the bank- ing situation, were taken by all em- ployes and artists. ‘The Board of Directors of the Acad- emy of Motion Picture Arts and Sciences, meeting shortly after the ul- timatum was given them by the pro- ducers, recommended to its members they take the proposed reductions. For salarles more than $50 weekly, a cut of 50 per cent for the eight-week period would be made with a mmimum salary of $37.50 established. Those earning less than $50 weekly would take a 25 per owBt cut with a minimum of $15 a weels, ‘The cuts would be retroactive start- ing March 6. “The studios no longer can exist unless substantial cuts in ‘pay are | made,” said a spokesman for the pro- ducers. The studios will remain open, it was announced, pending the action of em- ployes regarding the proposed reduc- tions. TAKEN TO GALLINGER John O'Brien, 45, of the 600 block of Twenty-second street, was taken Gallinger Hospital yesterday after he had been found in his cell at No. 3 police station hanging by his shirt which was tied around a bar in th cell and around his neck. His cond tion was said not to be serious. O'Brien, who was charged at the station with drunkeness, was found tied by a policeman. Cossglele Listing of 18,869 GOVERNMENT POSITIONS Not Under Civil Service 2 Get Your Copy Now Limited Supply GARRISON’S The House of Novelties 1215 E St. N.W. e ) mgake. “News! News! We must have news or we will be no better off than the ancients.” All right, suppose we give them news but cut out the advertisements. 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