Evening Star Newspaper, March 13, 1933, Page 4

HOARDING BLOCKED 'BY BANKING RULES Institutions Permitted to Ask ;. Patrons What Is to Be f Done With Money. By the Assoclated Press. New regulations to hold tight the Government's control of gold and to prevent what President Roosevelt calis the “unpopular pastime” of hoarding, today governed the banks that were told they could reopen. In issuing these regulations, Secre- tary Woodin reminded that no business could be done with gold coins or gold certificates. In fact, he appended the proviso that a number of.Federal and private institutions taking advantage of the opportunity to reopen must deliver all gold or gold certificates to the Treas- ury within 30 days. And he likewise gave to the banks the. power to demand statements under oath that money to be withdrawn will not be hoarded. Many Cities Listed. Authorized to open today on these terms were Federal Reserve and licensed banks in Boston, New York, Phila- delphia, Richmond, Atlanta, Cleveland, C! go, St. Louis, Kansas City, Dallas, Minneapolis and San Francisco; Fed- eral Reserve branch banks in Buffalo, Cincinnati, Pittsburgh, Baltimore, Char- lotte, New Orleans, Jacksonville, Bir- mingham, Nashville, Detroit, Louisville, Memphis, Little Rock, Helena, Mont.; Omaha, Denver, Oklahoma City, El Paso, Houston, San Antonio, Los An- gcles, Portland, Oreg.; Salt Lake City, Seattle and Spokane. The institutions to which the new gold order applies are Federal land banks, intermediate credit banks, joint stock land banks, Federal home loan banks, regional agricultural credit cor- porations and the Reconstruction Cor- poration. May Block Withdrawals. ‘Woodin’s announcement about hoard- ing withdrawals was addressed to all banking institutions, “whether or not licensed to carry on usual and normal functions,” and said: “No banking institution shall permit any withdrawal by any person when such institution, acting in good faith, shall deem that the withdrawal is in- tended for hoarding. Any banking in- stitution, before permitting the with- drawal of large or unusual amounts of currency, may require from such per- son requesting such withdrawal a full statement under cath of the purpose for which the currency is requested. X The text of the new regulations fol: ows: “Regulation No. 19. Except as other- ‘Wise prohibited by law, banking insti- tutions may exercise their normal and usual functions in permitting substi- tution for or release of collateral held by them, provided other collateral or cash of equal or greater value is re- ceived in exchange therefor.” “Regulation 20. All Federal Reserve banks and their branches and agencies may open March 13, 1933, and may re- main open for the performance of all usual and normal banking functions ex- cept as prohibited by the executive or- der issued by the President on March 10, 1933, and any further orders or Tegulations hereafter issued.” Forbids Paying of Gold. “‘Regulation 21. Banking institutions which are not members of the Federal Reserve system or organized under the laws of the United States and which are not under the immediate super- vision of any State authority may, on or after March 13, 1933, carry on their normal and usual functions except as otherwise prohibited and except that 1o such institution shall pay out any gold coin, gold bullion or gold certifi- cates, unless authorized by the Secre- tary of the Treasury, nor allow with- drawal of any currency for hoarding, nor engage in any transaction in for- eign exchange except such as may be undertaken for legitimate and normal business requirements, for reasonable traveling and other personal require- ments, and for fulfillment of contracts entered into prior to March 6, 1933.” “Regulation No. 22, All Federal land banks, Federal intermediate _credit banks, joint stock land banks, Federal home loan banks, regional agricultural credit corporations and the Reconstruc- tion Finance Corporatfon are hereby permitted to open at 9 o'clock am. Monday, March 13, 1933, to perform their usual banking functions, except to the extent prohibited by the executive order of the President of the United States, issued March 10, 1933, by Fed- eral or State law, or as may hereafter be limited or prohibited by regulations promulgated by the Secretary of the “Treasury. Can Revoke Authority. “This permission, as to each of the foregoing banking institutions, may be revoked, in whole or in part, by the Secretary of the Treasury at any time, and is granted as o each such insti- tution upon the express condition that such institution shall deliver, within 30 days from the date hereof, to the Treas- urer of the United States, or to a Fed- eral Reserve bank, or a Federal Ré- serve branch bank of the district in which it is located, all gold coin, gold bullion and gold certificates owned by it, and receive payment in credit or in other forms of coin or in currency.” Regulation No. 24, respecting State drafts, follows: “All banking institutions may cash official drafts drawn upon the Secretary) of State for payment of salaries, trav-| eling and other contingent expenses, but not for personal account, and remit the amounts thereof to the banks from which the drafts are received, provided that no gold or gold certificates shall be paid out.” MEMPHIS BANK BARES REORGANIZATION PLANS TUnion Planters National Will Ab- sorb State Subsidiary and Divorce Three Affiliates. By the Associated Press. MEMPHIS, Tenn., March 13.—The Union Planters’ National Bank & Trust Co. last night amouz.cd plans event- 0 absorb Giace sul . the tton Savings Bank & Trust Co., divorce three affiliates. !mer Winston, president, said in his announcement that “these moves are in line with the proclamation of Pra:ident Roosevelt.” The three affillated institutions to be cut loose from the national bank are the Bluff City Abstract Co., the Union Planters’ 'rlge ocu:mnty Co. and the Union Planters . Winston said the Manhattan's State bank charter would be retained but that the bank would act as a holding company for the affiliates. FORM WOMEN’S COUNCIL ually Manhs: a ALL OF EUROPER 000,000 ¥$ 6,825, WHAT IS THE GOLD STANDARD? IT1S A MEASURING STICK FOR MONEY At oty COUNTAES Back of such world’s monetary gold suppl accompan; billion do! s in gold. uestions as the gold standard an Of the total, $12, map showing how the remainder INTRIES ON the BASIS of THIS STICK the GOVERNMENT PROM- j!El‘ é?fcufufi @OLD FOR MONEY AND MONEY FOR 60LD United States 000, an )& BY J. R. BRACKETT. NEW YORK (#)—On or off the gold standard, the United States has more gold than any other nation in the world. Only four countries—aside from the United States—are on the gold stand- ard without restriction. These are France, Belgium, Switzerland and the Netherlands. Free use of gold has been stopped in the United States by the bank em cy. World stocks of monetary gold total about $12,000,000,000. The United States has a third of this total; France has a fourth; no other country has as much as one billion. | I Gold Standard Implies Redemption. Being on the gold standard means that the unit of a nation’s currency and coin is fixed as a definite weight of pure gold. The United States dollar equals 23.22 grains of it. Maintenance of the standard pledges the Government to pay money for gold at all times and to redeem money with gold at the specified Tate. | Many countries subscribe to the re- quirements of this definition in part, but only France, Belgium, Switzerland and the Netherlands subscribe to it fully now. Gold has been chosen as the stand- ard of money primarily because it is a commodity universally desired and easily handled. It is desired because it is rela- tively scarce. It originally became de- sirable in part because of its ornamental use, but tradition has given it additional value. Gold Measures Money. Gold is simply a measuring unit for momey, just as a yard is a measuring unit for distance. A dollar—defined al- ways as equal to 23.22 grains of pure gold—may buy more in one year than in another. A dollar could be defined as & bushel of wheat—in fact, this has been seri- ously proposed—or a certain weight of silver, or platinum or a group of com- modities. But no matter what the defipition of the money standard, if that definition is unchangeable, it does not determine the purchasing power of the money. A dollar is always a dollar in terms of its definition. The amounts of other things it will purchase vary with the times. It is not absolutely necessary to have any commodity for a standard. Eng- ational finance lles consideration of the distribution of the and France more than half, the possess Aside from these two countries, no nation has as much as & ¢ land’s pound, on no standard now, fluctuates according to the supply of and demand for the pound. Not Always Exchangeable. While gold may serve as a measuring stick, it may not be always exchange- able for money. In Germany, for in- stance, the currency may not be turned into gold, yet it is defined as equal to a specified weight of gold. Germany will ship gold to other countries only when it 1;’ e;lclided t:-ol be nhloluut:lg" necessary central bank. countries are now using gold on this bass. Before the depression nearly all coun- tries were on the gold standard without jons. But when the people at home and when other nations suddenly desired that the money owed should be turned into gold the governments were forced to declare restrictions to pro- tect their gold supplies. | ‘The United States has $4,000,000.000 in gold—sbut at the time the bank holiday was ordered there was some $6,000,000,000 or $7,000,000,000 in money in’ciyculation and some $40,000,000,000 in bank deposits. It would be impos- sible to turn all of this into gold. U. S. DOLLAR IS SOLD ABOVE PAR IN PARIS AFTER BOURSE CLOSES (Continued From First Page.) were ready to resume - “legitimate” transactions in the currencies of other countries today. ‘The Exchange Committee of the banks early circularized all institutions, repeating the restrictions laid down by the Treasury regarding the reopening of foreign exchange dealings. Under the Government'’s ruling for- eign exchange may be bought or sold for all legitimate purposes, for reason- able traveling expenses and for the ful- fillment of contracts which were entered into prior to the declaration of the banking holiday. In London the official rate for the pound sterling was $3.43% at the begin- ning of business. This compares with | $3.443, on March 3, the day pricr to the suspensicns of transactions in the United States. French francs on the London market were quoted at a nomi- | nal rate of 3.92 cents, compared with | 3.85 5-16 cents on March 3. | Bankers stated that the principal aim | in future exchange trading would be to prevent purchases of foreign funds | which might be interpreted as a “flight | of capital.” In other werds, efforts to | sell the American dollar, or trade it for any foreign currency, are to be | viewed as “hoarding” and will not be | permitted. Dollar Climbs in London. LONDON, March 13 (#).—The re- sumption of dealings in United States dollars today created a favorable im- pression on the stock exchange, espe- clally in the gold mining shares, and | quotations immediately hardened. In the transatlantic group where prices had eased a fraction since the morning there was a tendency to await the opening of the New York-exchange, the market here having already dis. unted the effect of the favorable rate y raising quotations over the level pre- valling prior to New York's banking hoiida) Most of the other sections ruled easy | on reports of the situation on the Con- tinent, although signs of hardening were shown in several instances. After today's opening the dollar im- proved in subsequent transactions, climbed to $3.44, then slipped at $3.43'¢. ‘There was little business, for the trad- ers were awaiting developments, ‘The close was $3.433%;. Profit for World Bank. BASEL, Switzerland, March 13 (#).— The World Bank probably will make a good profit on the recent weakness of the Amerjcan dollar. This morning the Board of Directors reported the bank's dollar engagements were considerably heavier than its credits. In connection with the recent exten- sion of & $70,000,000 credit to the Ger- man Reichsbank, the board lowered the interest, rate today from 5 per cent to 4 per cent, as of March 4. LOAN FIRMS .TO OPEN IN LOUISIANA TODAY Practically All Associations in State Will Resume Operutions, ‘With Curb on Withdrawals. By the Associated Press. NEW ORLEANS, March 13.—Otto M. Lind, president of the Louisiana League of Homesteads and Building and Loan Associations, announced to- day that practically all the associations in the State will reopen today under restrictions. He sald operations of the homesteads would be confined principally to re- ceipt of payments on loans, collection of rentals and repair of properties, but that “no withdrawals will be per- mitted or new applications for loans Teceived except in cases of emergency.” ers here, meanwhile, awaited further national developments before taking definite action toward reopen- ing New Orleans financial institutions. Calvert County Residents Name Mrs. Hugh Ward President. Special Dispatch to The Star. LEONARDTOWN, Md., March 13.— Calvert County women have formed a Rural Women's Council and elected the following officers: President, Mrs. Hugh ‘Ward of Owings, Md.; vice president, Mrs. Everard Briscoe, and secretary- treasurer, Mrs. Harry Hughes, both of Prince Frederick, Md. Clinton P.-T. A, to Meet. CLINTON, Md., March 13.—The Parent-Teacher Association of the Clin- ten Bchool will meet Thur:day in the & suditorium. ey 13 STORE IS LOOTED Entrance Is Gained by Breaking Window of Post Office, Special Dispatch to The Star. DELAFIELD, Md., March 13.— Thieves broke a window of the post office here last night and entered the Delefield Supply Co, adjoining. A small amount of cash and goods were taken. A check showed nothing missin from the post office, but Marshall Wells. a clerk in the store, sald that 300 - nies were taken from & penny machine. | | ica, $1 in pennies from a cash drawer, and five pairs of shoes were also missed. STRONG CENTRAL BANKS SAVE BRITAIN FROM PANIC EVILS “Big Five” Control Nation's Finance Sys- tem Through Branches and Make Giant Pool of Resources Possible. BY H. J. J. SARGINT. Special Dispatch to The Star. LONDON, March 13 (N.ANA).— “You know, as well as I do, the defects of our over-individualized banking sys- tem and the need for reorganization which is long overdue, I shall only say, therefore, that, as one who has had a long experience in American banking, I am fully confident that this is a temporary crisis and that American bankinz will profit by the reforms that will undoubtedly come as the resuli of the difficulties through which we are passing at present.” When ' Ambassador Mellon uttered | these words in a speech in London re- cently they suggested themselves as a useful opening to a dispatch seeking to explain just why no bank has failed in England since 1920, when one, & minor institution, closed its doors. If the question is put to London bankers—why is it that in 10 years of steadily intensifying trade depression there have been no bank crashes in in the United States many ba answer is invariably that in England the type of bank which fails in Amer- the small local bank, operating alone and with no backing but its own resources, does not exist. The old local banks, usually family institutions, which abounded in the English provinces in large and small cities a generation ago, have all been peacefully eliminated by absorption in one or other of a dozen or so great banks with hundreds, and in some cases thousands, of branches which hold be- tween them practically all the money of the country. That there should be thousands of separate banks in Amer-"| ica is incomprehensible to English bankers. ~ Every Village Served. England s well served with banks. There is not a sizeable village which has not & branch of at least one of the “big five.” Usually there are two. The branch, of course, attends to local busi- ness but it is not a local bank. Behind it are all the resources of the' entire institution. The “big five,” that is Barclay’s, Llcyd's, the Midland, the Westminster and the National Provincial Banks, do business on such an enormous scale and they figure so largely in the na- tional calculations that panic cannot come near them. ‘The most nervous depositor knows that if any of his money is not safe in the keeping of one of the big five, it is not safe anywhere. If one of these institutions failed, it would cause an unimeginable catastro- phe and the public is rightly con- vinced that neither the state nor the other big banks would allow such & thing to happen. England could no more afford to allow one of these great banks which hold the small man’s money _to crash than she could afford to lose & war. . It is for this reason that there has not been a bank failure in Britain since Farrow’s bank closed in Septem- ber, 1920. For the same reason, although the sudden announcement that the country was going off the gold standard on September 21, 1931, pro- foundly shocked England, the banks re- celved the news without even a tremor. No one doubted that they would meet their obligations, even although they might be forced to pay them in cur- rency depreciated by nc fault of their own. Farrow's was a bank with about seventy branches in London and other towns and a capital of $20,000,000. It failed in a year, not of depression but of active speculation and over-confi- dence. Its disappearance lent strength to the prevalent financial doctrine in England that banks, like individuals, should not live alone. Strong Control Credited. This principle of the big bank with hundreds of branches, so well estab- lished in the public eye that it is im- mune from panic, is the main dif- ference between the Brtish and Amer- jcan banking systems. It is not con- tended that British methods in detall are superior to American or that they differ very much fro mthem. British banks are subject to no special laws compelling them to maintain & definite ratio between the amount of thetr de- , | sented [ high degree of liquidity of their re- serves. The great banks keep with the Bank of England cash balances amounting |to from 10 to 12 per cent of their liability for their own deposits. About 5 per cent of their holdings is invested in short call loans to the stock ex- | change, which can be called in mostly at 7 days’ notice or at most at 14 days. About 5 per cent is always repre- | sented by commercial bills realizable in three or four months' or at most six months’ time. British banks never lend except onY | full security and they do not finance industry in the manner of the German | banks. With some 20 per cent of their deposits available either at once or at short call, the British banks are well prepared to meet emergencies. It is not pretended, of course, that in the case of a rud any of them could return the whole of their deposits at! once, but a run that started on any| one of the big banks would certainly be stemmed with the help of the others. Consequently, however bad business may be, a panic situation does not! arise, nor can it happen as it does sometimes in Amecrica, that a banker having lent his depositors’ money on land mortgage finds himself compelled to suspend payment bacause the mort- !gagees awe hit by the depression and unable to meet their bills. If the man- ager of a branch lends unwisely, the accounts of that branch may read un- favorably, but the loss is, at the worst, to be written off against the earnings of the hundreds of branches which | have not been led astray. - Canadian Record Cited. It is observed in this country that there are no bar failures in Canada, | either, although tiie slump has hit that | Dominion with very great severity and affects every sector of its economic The relative strength of the Ca- bafiks secms to lie in the fact that Canada also has eliminated the small local banker and adopted the system of a few big banks with hun- dreds of branches operating throughout the country. (Copyright, 1933, by North America: - vaver Allance, Tney o0 NV Al U, S, Rallying Behind Roosevelt, Far- Reaching Importance Seen Should Congress Give Economy Authority. BY DAVID LAWRENCE. If Congress, as seems probable, should give President Roosevelt power to cut veterans' pensions and allowances, then a precedent of far-reaching importance in the operation of the American Gov- ernment will have been established. Politics and minorities have prevented the passage of laws that reduce salaries and pensions, Congress today s Roosevelt do the cutting is a recognition in private of what is not always ad- mitted in public. The impractability of cutting appropriations, item by item, with one group combining with an- other group to forestall the elimination of certain expenses is accepted by every- body as the prime reason why the President now is asked to do the economy job for Congress. Failure of Congress Shown. But there is something else even more important in the extension of authority to the President over the Veterans' Bureau. It is the principle that the legislative branch of the Gov- ernmen! riation bills contained too tions which restricted the executive officials and prevented them from cutting their expenses to meet incoming revenue. Congress has been reluctant to relinquish its control over specific appropriations, but if it can be done under the of present emergencies in the case of veterans’ expenses it might also bureaus and departments of A Many & business man has wondered why it is that & Government bureau does not as a rule have the discretion- fons con, 1 instructions ten into Mm require the ex- pendl;eux;ugf’ e u'hen economies can 3 us if Congress con- nmxmxrmmmmotm and sets forth principles the - trative arm of the Government would haVe a better opportunity to watch the Ppennies. House Action Shocks Groups. ‘The passage by the House of the broad grant of authority to the Presi- dent to cut pensions and veterans’ ex- penses came as a shock to many of the groups here which hitherto have been powerful influences in delaying or defeating such legislation. To credit' of the Republicans as well as the Democrats, it must be said that the overwhelming vote enabled the House to dispose on Saturday of one of the most troublesome pleces of legislation in the history of the depression—the economy bill. The Senate may debate the measure at some length, but the ultimate action there will be the same as the House. Inteed the Senate has shown itself to be-more in tune in the last year with the demands of public opinion on| economy than were House members. If Mr. Roosevelt accomplishes thik week the passage of all his emergency program, his record of achievement will be unparalleled, except in time of war and there are evidences that Congress gravely considers the present emergency | be more dangerous than war. | da; When Britain cut her expenses and ! balanced the budget, there was an im- | mediate rise in pound sterling. So now | may we expect that as the legislative program of the new President is passed, | the rest of the world will have an enhanced conception of the value of | the dollar. And the borrowing power of the Federal Government and its| right to issue more currency on faith | will be accepted by the economists and | financial experts as based now upon a really sound base. (Copyright, 1933.) MERGER INDORSED | IN DETROIT BANKS | Heads of Guardian National and First Naticnal Approve Proposal for New Institution. By the Associated Press. DETROIT, March 13.—A Federal plan for the formation of one new De- troit bink out of the Guardian Na- tional Bank of Commerce and the First National Bank was tentatively accepted by directors of the two institutions last night. The proposed new bank, to be main- tainedeon a 100 per cent liquid basis, | would release $227,000,000 in currency | for distribution among depositors of the | two present banks as soon as transfe ers can be effected. | Under the Federal Government's | Elnq large depositors of the Guardian ational and the First National would raise $5,000,000 to provide .capital for the new bank. The Reconstruction | Finance Corporation would take $20,- 000,000 in prefered stock. The deposi- tors raising the $5,000,000 would re- ceive the equivalent in common stock. Simultaneously, the District Clearing House announced last night that it had abandoned plans for issuing $26,000,000 in scrip because it had discovered that counterfeit scrip had been printed. It was decided to release an equivalent amount of cash instead. Under the plan for the new bank a proximately 30 per cent of the deposits in the Guardian National and the First Messages Indicate White House Is Deluge by Mail, Telegrams and Phone Calls. By the Associated Press. Heaps of mail and telegrams and numerous telephone calls brought evi- dence to the White House today of the support Fe~dent Roosevelt is receiving from the public in the banking emer- gengy. From every section of the country samz suggestions for restoring confl- ence. Pledges of support began when the holiday was first proclaimed and reached a peak last night after Mr. Roosevelt had made a radio appeal for confidence_and courage. A few minutes concluded, board was deluged with telephone calls {rom all sections, each caller praising Mr. Roosevelt's outline of the problem. So great was the volume of calls it was impossible for the switchboard to handle them all. State officials, business men, bankers and the plain citizen have sent thou. sands of telegrams confidence so that widespread runs :%mammvdnpwhmmhnhn— did not oall” for such measures. g:t:m:u wguld be nutde availabe, This, WO per _cent releases, d make a total of about 40 per cenl.'wl CROP LOANS ASKED Special Dispatch to The Star. UPPER MARLBORO. Md., March 13. —Applications for Federal crop loans are belng received in Prince Georges County by County Agent W. B. Posey In his office here. “Loans to a maximum ©of $300 for each borrower can be made for supplies for crop production for cash crops, including fertilizer, for not more than $6 an acre for general field crope, $10 20 acre for tobacco and $20 an acre for truck crops, including sweet potatoes. it Roosevelt before the microphone st the White House last night banking #5 he assured the Nation of the firmness of the By the Associated Press. HE text of President Roosevelt's radio address last night follows: I want to talk for a few minutes with the people of gmm ‘bankin the the States about g— comparatively few who une the mechanics of bank- ing, but more particularly with the overwhelming majority who use banks for the making of drawing of checks. I wantto tell you ‘what has been done in the last few days, why next steps are coing to be. that the m.‘moehmum from tals from Washington, on, the Treasury regula- etc., couched for the most part in and legal terms, should be ex- plained for the benefit of the average citizen. particular because of with 1 recognize I owe this in the fortitude and good temper with which everybody has accepted the in- convenience and har of the banking holiday. I know that when you understand what we in Washing- ton have been about I shall continue to have your co-operation as fully as I have had your sympathy and help dur- ing the past week. ‘What Becomes of Deposits. First of all let me state the simple the| fact that when you deposit money in a bank the bank does not put the money into a safe deposit vault. It in- vests your money in many different forms of credit—bonds, commercial | Ppapef, mortgages and many other kinds | of loans. In other words, the bank puts your money to work to keep the wheels of industry and of agriculture turning around. A comparatively small part of the money you put into the bank is kept in currency—an amount which in normal times is wholly sufficient to cover the cash needs of the average citizen. In other words the total amount of all the currency in the country is only & small fraction of the total de- posits in all of the banks, ‘What, then, happened during the last few days of February and the first few ys of March? Because of under- | mined confidence on the part of the | public, there was a general rush by a large portion of our population to turn | bank deposits into currency or gold—a rush so great that the soundest banksl could not get enough currency to meet the demand. The reason for this was that on the spur of the moment it was, | of course, impossible to sell perfectly sound assets of a bank and convert them into cash except at panic prices far below their real value. | By the afternocn of March 3 scarcely | a bank in the country was open to do | business. Proclamations, temporarily | closing them in whole or in part, had | been issued by the Governors in almost | all the States. Natlon-Wide Holiday Ordered. It was then that I issued the proc- | lamation providing for the Nation-wide | bank holiday, and this was the first step in the Government's reconstruction of | our financial and economic fabric. | ‘The second step was the legislation | promptly and patriotically passed by the Congress confirming my proclama- tion and broadening my powers so that it became possible, in view of the re- quirement of time, to extend the holi- day and lift the ban of that holiday gradually. This law also gave author- | ity to develop a program of rehabilita- tion of our banking facilities. I want to tell our citizens in every part of the Nation that the National Congress — Republicans and Democrats alike— showed by this action a devotion to public welfare antl a realization of the emergency and the necessity for speed that it is difficult to match in our his- to Ty. The third stage has been the series of regulations permitting the banks to continue their functions to take care | of the distribution of food and house- hold necessities and the payment of pay rolls. This bank holiday, while resulting in | many cases in great inconvenience, is affording us the opportunity to supply the currency necessary to meet the situ- ation. No sound bank is a dollar worse off than it was when it closed its doors last Monday. Neither is any bank which may turn out not to be in a po- sition for immediate opening. The new law allows the 12 Federal Reserve banks D-| to issue additional currency on good assets, and thus the banks which reopsn will be able to meet every legitimate call. The new currency is being sent out by the Byreau of Engraving and Printing in large volume to every part of thé country. It is sound currency because it is backed by actual, good assets. Guards Against ‘Failures. L question you wil ask 13 this: Why are al the banks not to be reopened at the same time? The answer is sim- ple. Your Government does not in- tend that the history of the past few years shall be repeated. We do-not want, and will not have, another epi- demic of bank failures. As a result we start tomorrow, Mon- day, with the opening of banks in the 12" Federal Reserve bank cities—those banks which on first examination by EISEMAN’S Seventh & F Sts. SPRING SUITS, *18 NOTHING DOWN $6 IN APRIL $6 IN MAY " $6 IN JUNE No Interest Charged for fhcu Terms JUST PAY it was done, and what the | be | begin { every good bank has system. —Associated Press Photo. the Treasury have been found to be all right. This be followed on Tuesday by the resumption of all their functions by banks already found to be sound in cities where there are recognized clennnf houses. That means about 250 cities of the United States. On Wednesday, and succeeding days, benks'in smaller places all through the cot - ry will resume business—subject, deposits and the | of MARYLAND BANKS SEEKING T0 OPEN Commissioner Continues Work Preparatory to Re- vealing Approved List. By the Assoclated Press. BALTIMORE, March 13—John J. Ghingher, Maryland bank commission- er, today continued his work prepars- tory to announcing which State banks would be permitted to open tomorrow and Wednesday. Applications poured in late Saturday and yesterday, but the commissioner would not reveal how many he had re- ceived nor would he give any indica- tion about those that would open. He sald, however, a majority of Maryland's State banks had requested permission to reopen. Yesterday many of the bankers from outside Baltimore came to Ghingher's office to tbm::.n )t‘l:etrb applications and one county T ht with him his board of d!recwrs.mg After his appeal to President Roose- velt late Saturday asking for equality in treatment in State and national banks, Gov. Albert C. Ritchie last night sent this telegram to the President: “I earnestly and respectfully appeal to you to declare for equality of treat- ment for the State banks in your broadcast tonight.” He listened to the President's speech in his suite at a hotel here, but after- ::“d declined to comment on the ad- ess. Ghingher sald there were 125 State banks and trust companies and 13 mutual savings institutions operating in Maryland the day before the bank holi- day. Five of the 125 State banks are is | Federal Reserve members and conse- ent days is xactly the same status as the bank opens tomorrow. State Banks to Be Aided. 1 know that many people are worry- ing about State banks not members of the Federal Reserve system. These banks can and will receive assistance from member banks and from the Re- constryction FPinance Corporation. These State banks are following the same course as the National banks, ex- cept that they get their licenses to re sume business from the State authori- tles, and these authorities have been asked by the Secretary of the Treasury to permit their good banks to open up on the same schedule as the national banks. I am confident that the State banking departments will be as careful as the Natioral Government in the pol- icy relmnfiato the opening of banks, and will follow the same broad policy. It is possible that when the banks Tesume, a very few people who have not recovered from their fear may again | withdrawals. Let me make it | clear that the banks will take care of all needs—and it is my belief that hoarding during the past week has be- come an exceedingly unfashionable pas- time. It needs no prophet to tell you that when the people find that they can get their money—that they can get it when they want it for all legiti- mate purposes—the phantom of fear | will soon be laid. People will again be glad to have their money where it will be safely taken care of, and where they can use it conveniently at any sime. I can assure you that it is safer to keep your money in a reopened bank than under the mattress. The success of our whole great na- tional program depends, of course, upon the co-operation of the public—on its intelligent support and use of a re- liable system. Remember that the essential accom- plishment of the new legislation is that it makes it possible for banks more readily to convert their assets into cash than was the case before. More liberal g;uvmon has been made for banks to rrow on these assets at the Reserve banks and more liberal provision has also been made for issuing currency on the security of these good assets. This currency is not fiat currency. It is issued only on adequate security—and an abundance of such security. As to Reorganizations. . ‘One more point before I close: There will be, of course, some banks unable to reopen without being reorganized. The new law allows the Government to assist in making these reorganiza- tions quickly and effectively, and even allows the Government to subscribe to at least a part of new capital which may be required. I hope you can see from this ele- mental recital of what your Govern- ment is doing that there is nothing complex, or radical, in the process. We had a bad banking situation. Some of our bankers had shown them- selves either incompetent or dishonest in their handling of the people’s funds. They had uced the money entrusted to them in speculations and unwise loans. This was, of course, not true in the vast majority of our banks, but it was true in enough of them to shock the people for a time into a sense of insecurity and to put them into a frame of mind where they did not differentiate, but quently will apply to the Federal Re- serve bank in Richmond for reopening. | ECONOMISTS .URGE INFLATION FOR U. S. Controlled Program Could Avoid Evils and Ease Distressing Con- ditions, Roosevelt to Be Told. By the Associated Press. COLUMBIA, Mo., March 13 —Four economists, members of the Univer-aty | of Missouri faculty, made known ves- terday they had circulated amor; .ac- ulty members of 100 universities and colleges of the country a petition ask- ing President Roosevelt and Congress to adopt a program of “controlled in- flation.” The petition, it was announced, has | been signed by 150 teachers of eco- nomics, including Profs. Irving Fisher of Yale University and John R. Com- | mons of the University of Wisconsin. Signers of the petition urge “immediate and vigorous action looking to an in- :rxe):se énbme g&n&a! price level, to be ollowed by a ite attempt at sta- | bilization.” 4 “Superstitious fear of any kind of monetary adjustments,” the petition says, “sheuld not be allowed to stand in the way of vigorously constructive action designed to end the existing | agricultural and industrial distress.” The University of Missouri faculty members sponsoring the petition are Dr. Harry_Gunnison Brown, Dr. O. R. Johnson, Dr. F. L. Thomsen and Dr. C. H. Hammar. 26th Mine Bomb Harmless. TAYLORVILLE, TIl., March 13 (#)— The twenty-sixth bomb to be exploded | during coal mining difficulties in Chris- tian County yesterday shattered win- dows at the home of Artis Merchants in nearby Tovey. No one was injured. seemed to assume that the acts of & comparative few had tainted them all. |1t was the Governmenys job to straighten out this situation, and do it as quickly as possible—and the job is ! be!ing p!;{omtd,. | 0 not promise you that every bank | will be reopened or that individual | losses will not be suffered. but there | will be no losses that possibly could be avoided: and there would have been | more and greater losses had we con- | tinued to drift. I can even promise | You salvation for some at least of the sorely pressed banks. We shall be en- gaged not merely in reopening sound | banks, but in the creation of sound banks through recrganization. | 4, It has b wonderful to me to catch the note of confidence from all over the country. I can never be sufficiently grateful to the people for the loyal sup- port they have given me in their ac- | ceptance of the judgment that has dic- | tated our course, even though all our processes may not have seemed clear to them. | _ After all, there is an element in the | readjustment of our financial system more important than currency, more | important than gold, and that is the | confidence of the people. Confidence and courage are the essentfals of suc- cess in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the mahinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it s mine. Together cannot fai Reupholstering | 5-Piece Parlor Suites... 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