Newspaper Page Text
ALL SLATES ORDER
BANK SAFEGUARDS financing at Standstill as U. S. Leaders Map Speedy Action. (Continued Prom First Pa'je.'i Enid. Okla . where National Guards men enforced Gov. William H. Murray's mandatory closing proclamation on the First Nation;.1. Virginia was one of the last States to order bank restrictions. Gov. Pol lard last niylit announced declaration of a mandatory holiday tomorrow and Tuesday. Pi Hard said his action was t.ik< 11 with the recommendation of the Richmond Federal Reserve Bank. "Siiue making my statement of Fri day ni;;!::." ro.l..rd said, "there have been unforeseen developments in New York and in e ther financial centers of the country where bank holidays have been declared." Cited State I.aiv. Friday night Pollard said he saw no necessity for a holiday in view of Virginia's law permitting banks to close Individually by applying to the Corpo ration Commission. The first thought of business in gen eral was to provide sufficient cash for pay rolls and routine expense. Al though nine-tenths of business nor mally is transacted by check—and checking wis impossible everywhere— no cities reported rerieus curtailment in commercial and industrial activities. The New York Stock Exchange and the Chicago Hoard of Trade, largest trading organizations, respectively, in securities and grain futures, were closed, and so were smaller markets of the kind. Live stock and cu.-n grain mar kets remained open, but transactions were at lower volume. The average (itizen's chief trouble appeared to lie in difficulty of cashing pay checks. Stores generally extended credit more liberally for household necessities, however, and larger places gave some cash in accepting checks for payment of bills or mai.iig of pur chases. Smaller merchants developed a fear that their supplies of cash would run short and were cauiious about accept ing currency laryer than $!0 in de nomination. The Chicago surface lines feared a shortage of pennies for its 7 cent car fare business. Many tax-collecting bodies reported increased revenue for the day as tax payers took advantage of provisions in some mandatory closing proclamations cr limited withdrawal re^ntlatipns which permitted larger withdrawals for pay ment of taxes. Unemployment relief funds also v.ere generally excepted from the restrictions. Reserve Banks Follow. Federal Reserve banks generally fol lowed the route of State and national institutions, with the explanation that such is * lie policy for holidays. No gold exports were permuted with the holiday In effect. Students of finance explained the situation arose not fr<_.m lack of sU bility, but lather because of huge de mands lor cash. Authorities of many States declared holidays with the ex planation that previous action in neigh boring States ni-de it necessary. No matter what liquidity financial Institutions attained, it was said, it would be impossible for the $40,000, 000.000 in American banks to be with drawn suddenly in cash. The 140-odd banks reporting to the Chicago Federal Reserve Ejnk stated withdrawals total ing nearly a billion dollars were made in the week ended March 1. The foreign effect of American bank ing regulations was broad. International payments were halted, foreign ex changes could not be bought in New York and the dollar was not quoted abroad. Money orders generally were limited to $100. One company paid 25 per cent cash for incoming money orders and gave checks for the balances. R.il road companies took emergency action, announcing broadened credit and stating that travelers would not be left 6*ianded anywhere because of bjnking difficulties. Delaware was the last State to hold ®ut without banking restrictions, but an indefinite holiday was declared last night. Midwest and New England States took action toward holidays in rapid succession early in the day after I mcratoria had been declared in the im- i portant banking centers of New York! end Illinois. ADDRESS STIRS DENMARK Papers Say Roosevelt Heralded New i Era in Human History. COPENHAGEN. Denmark, March 4 (.I*'.—President jfioosevelt's inaugural, address was described here today as j "tremendously impressive." Leading Danish journals hailed the President and his speech as being her alds of a new era in the history of man kind. TODAY'S "STAR PART ONE—20 PAGES. General News—Local, National and | Foreign. PART TWO—8 PAGES. Editorials pnd Editorial Features. Btamps—Page 4. News of the Clubs—Page 4. Schools and Colleges—Page 5. PART THREE—10 PAGES. Society Section. Disabled American Veterans—Page 10. PART FOl'K—8 PAGES. Amusement Section—S age. Scrccn and : Music. In the Motor World—Page 4. Aviation—Page 4. District National Guard—Page 4. Y. M. C. A. News—Page 4. Y. W. C. A. News—Page 4. D. C. Naval Reserves—Page 4. Radio—Page 5. Public Library—Page 6. Reviews of New Books—Page 6. Notes of Art and Artists—Page 6. Crossword Puzzle—Page 7. Highlights of History—Page 7. Parent-Teacher Activities—Page 7. Organized Reserves—Page 7. W. C. T. U. Notes—Page 7. Community Chest News—Page 8. American Legion—Page 8. American War Mothers—Page 8. PART FIVE—4 PAGES. Sports Section. PART SIX—It PAGES. Financial News and Classified Adver tising. D. A. R. News—Page 10. Veterans of Foreign Wars—Page 10. Serial Story, "Some One to Love"— Page 11. Fraternities—Page 11. Community Centers—Page 11. American Legion Auxiliary—Page 11. PART SEVEN—48 PAGES. Inaugural Magazine Section. Those Were the Happy Days—Page 48 GRAPHIC SECTION'—12 PAGES. World Events in Pictures. COLOR SECTION—8 PAGES. Holly of Hollywood; Keeping Up With the Joneses; Reg'lsr Fellers; Mr. and Mrs.; Tarzan; Little Orphan Annie; IBpon Mullins; The Timid-.Soul; 'SI . Jyytttr Pop, i 5-TO-l ODDS OFFERED U. S. WILL BE ON GOLD JUNE 1 Insurance Is Quoted by Lloyds at 21 Per Cent—Britain and France Hail Roosevelt Speech. By the Associated Press. I/ON DON, March 4.—Extension of the American banking holiday to the powerful institutions of New York came as something of a shock to Europe, and even the experts were puzzled as to the course events will take. American tourist* found themselves theoretically broke when the banks halted transactions In dollars, but they were able to get money from the hotels and the tourist agencies. Rookcvrlt Aid* Confidence. Lloyds offered 5 to 1 that the United States will still be on the gold standard on June 1. Insurance against abandon ment of gold before that date was quoted at 1:1 per cent. Tae Roosevelt inaugural message, transmitted across the ocean seemed to restore confidence to a considerable de gree. "America need have no fear for the future with a man like that for Presi dent," said one Englishman who heard the speech. Said another: "He talked as though he means business. tie sounds as though he has the character end force to deal with any situation." Tourists Ui Fiance were in the same difficulties as those here. Tilts is a dull season for Paris, but the Kiviera is well populated. Appear* Determined. In Paris also the inaugural address was an encouraging factor. All who heard it agreed that It was an energetic pronouncement. A government spokes man said: "He appears determined to end this crisis as soon as possible even if he has to use extraordinary means. Energy like that is pleasing to France." The London Sunday Times, congratu lating ttie United States on its new President, described Mr. Roosevelt as "the man for America's hour of crisis. After an excellent beginning." said the Times, "he should succeed, for he has the character to do so. History should find Franklin D. Roosevelt not only as a great President of the United States, but also a benefactor of the world." OPTIMISM FELT IN NEW ENGLAND Banking Suspensions Forced by Action in Other State Capitals. Bv the Associated Press. BOSTON. March 4—Banks in the six New England States suspended busi ness today as the bank holiday move ment in the Nation spread to this section. Orders for the closing generally were for Saturday and Monday, with Rhode Island limiting the suspension to Satur- j day only and New Hampshire making \ its action indefinite pending develop- j ments. The Federal Reserve Bank at Boston, ! serving all of New England with the j exception of one Connecticut county. ! likewise declared a two-day holiday. : Clearing houses and the Boston Stock Exchange suspended business. Postal authorities here announced : that there would be no restraint placed 011 banking in the postal savings sys- i tern. Closing Order Defied. While banks of the six States com plied with the holiday requests generally there were instances of continued busi- j ness. In Connecticut many remained J open and the question arose as to j whether the Slate now had authority to order closing of the institutions. In Massachusetts an exception to the closing move was that of two banks in Amherst which continued to do business, officials saying they did not consider it necessary to suspend. Emergency action by State officials over the week end was expected in a concerted movement to cope with the situation and to place in the hands of the authorities the power to act where ; It is now lacking. In most cities of this section police 1 were stationed in the vicinity of banks and In some places anxious depositors I gathered, but no demonstrations were reported. Governor* in nasninfion. The Governors of all the New England States were in Washington for the in- | augural when the national situation caused them to act or give their ap proval to the holiday action. All of the Governors in their proc lamations or orders to subordinates ex pressed a spirit of optimism regarding conditions of banks in their own States and generally explained the action as having been precipitated by the proc lamation of holidays in other States. Acting Governor Charles M. Smith of Vermont in a proclamation said the ' banks of Vermont are not in trouble, but. of course, we can't go on with New York. Chicago and Boston closed." Gov. Joseph B Ely of Massachusetts said he was confident of the soundness of Massachusetts banks and Lieut. Gov. Bacon issued a supplementary statement saying there was "no cause for fear! or apprehension." | BANK PROBLEM LEFT | TO INDIVIDUAL STATES Insurance Commissioners End Ses sions Favoring Local Policies. By the Associated Press. CHICAGO, March 4—Solution of problems entering the insurance field j because of bank moratoiia and restric tions upon deposit withdrawals yester day was left to individual States by the Executive Committee of the National Convention of Insurance Commission ers. The committee, composed of eight State insurance cominlsisoners and su perintendents, ended a two-day extra ordinary session at which delegates from insurance company groups out lined the status of the insurance busi ness In view of recent financial de velopments. The meeting was held behind closed doors and at its conclusion the fol lowing statement was issued by J. B. Thompson. Missouri State insurance superintendent: "A full discussion of questions affect ins; the insurance field because of nu merous bank holidays and moratoiia was participated in by the commission ers and insurance company executives who were invited to the conference." Commissioners and insurance eom panv officials declined to discuss the .specific problems treated. Thompson said the parley had re sulted in crystallization of opinions, and a better understanding of individual problems confronting insurance com panies in respective States. He ex plained the committee decided that, inasmuch as It was an extralegal group authorized to act only in an advisory capacity. State Insurance superintend ents were better able to cope with their local situations. GOLD MINES HELPING BANKS OF ALASKA Institutions All Functioning: as Usual, Due in Part to Pro ducing Operations. By the Associated Press. ANCHORAGE, Alaska, March 4.— j Gold mines are helping keep banks of ' the territory open on a normal basis j Winifield Ervin. business manager of the First National Bank of Anchorage, and President E. A. Rasmussen of the Bank of Alaska, which has branches at Anchorage. Wrangell, Cordova and Skagway. said today that, so far as thev knew ail Alaska banks were functioning as usual. The fact that Alaska Is one of the heaviest gold-producing regions of America, they said, has been of mate rial assistance. Method Used in 1907 Crisis Expected to Be Used for Reopening. By the Associated Press. NEW YORK, March 4 —Preparations were rushed today by the New York Clearing House banks—with deposits of more than $5,000,000,000—to resume banking activity on Tuesday by the use of clearing certificates, the method successfully invoked In the crisis of 1907. Mortimer N. Buckner, chairman of the Clearing House, said, after a meet ing of the members, that the certifi cates, which would be used In lieu of currency, would be printed over the week end and that details of the plan would be announced later. Federal approval and co-operation was considered necessary in some quar ters. however, for the successful in auguration of the plan, and Gov. Leh man, who proclaimed the New York holiday at 4 a.m. today, said that no definite plans had yet been made for dealing with the situation after the two-day holiday terminates on Monday. Sets National Scope. Asked If the banks would reopen on Tuesday, he said, "I liope so." He said, however, that the problem had now become national in scope. "Until I know what the Federal pro gram and policy is going to b?. it is difficult for me to txprtss an opinion," he explained. In the meantime the Clearing House program to print the certificates was understood to be going forward, and it was said they would be ready in vari ous denominations, probably ranging from $5 up, for distribution on Tues day unless prevented by Federal or State action. The presence of Daniel E. Wocdhull. president of the American Bank Note Co.. at the Clearing House meeting was regarded as significant, inasmuch a; his company prints most of the secu rity certificates used in Wall street, and it was assumed that it might be called upon to print Clearing House certificates. No definite announcement of the Clearing House plan of action was ex pected before tomorrow night and pos sibly not before Monday. Meanwhile, Police Commissioner Ed ward P. Mulrooney took extraordinary precautious against robberies and dis orders. He canceled the days off of all police officials, ordered every detective in the department on duty tonight, detailed \ extra policemen to every station house to be available as guards for merchants or others with laige sums of cash on hand and ordered a reserve squad of a dozen men for every precinct, starting Monday, as a "precautionary and emer gency measure." There were no disorders tonight. Refuse to Close. At least two New York City banks did I not observe the holiday proclaimed by Gov. Lehman. At the Sterling National ■ business w as conducted as usual through , the half day, and officials said the bank j would be open on Monday. Joseph Pul bermacher, its president, said he did not consider the proclamation mandatory on national banks in condition to meet pay roll requirements. The National Bank of Par Rockaway. on Long Island, also remained open. Its president, John R. Burton, explaining the news of the Governor's message did not reach there until after the bank had opened. The larger of New York's department stores reported a normal Saturday's j business with checks accepted in lieu of, ca-sh in most of the stores. The checks. | however, had to be made out for no i more than $1 over the price of the pur- j chase as no change for more than $1 was given. Checks were still being accepted by the collectors of internal revenue for In come tax payments, and it was an nounced they would continue to be ac cepted during the bank holiday. The holiday was taken calmly by New Yorkers today as they went about their business and contrived to get along on what packet cash they had on hand. Business houses, with the exception j of financial Institutions, were open as usual and some of the large depart ment stores reported .shopping crowds were unusually large. The bank holiday was. of course, the main topic of conversation. The word quickly spread and not many per sons showed up at the closed bank doors. Those who did, saw signs which read: "Gov. Lehman has proclaimed Saturday and Monday bank holidays" or were told of the situation by attend ants, and quickly dispersed. Crowds gathered in front of a few savings banks early In the day, but there was no disorder and as soon as those who had gathered, many of them foreigners, had been made to under stand the situation, they left. Down in Wall Street, the clerks who found themselves with a three-day hol iday on their hands, were in somewhat of a festive mood and the flags flyir.g for the Inauguration helped to make I the famous street appear less austere. Everywhere there was good-natured discussion of how much one had in his j pockets and how he planned to appor- ' tion It over the week end. What to do about checks was a per- I plexlng problem. Most of the stores accepted checks, with certain restrlc- i tlons, for merchandise. Friends with extra cash on hand and neighborhood merchants who would cash small checks i were much in demand. The banking situation was quickly reflected In newspaper advertising. One store announced "Your charge account is as good as dollars" and added "if you haven't one. come in and open one.'" The telephone company said its bus iness was booming, not only with calls for information to financial institu tions and newspapers, but also with long distance calls connecting the financial district with all parts of the country as well as maiw foreign capi tals. N FINANCE MACHINE OF NATION HALTED Swift Movement to Convert Credits Ends With Ten sion Eased. By tl)t Associated Pitts. NEW YORK, March 4—The great financial mechanism of the United States stood still today. While a new President took office promising drastic and courageous emer gency action, the banks of New Xork and Chicago, an well as the New York Stock Exchange, the Chicago Board of Trade and other security and commod ity exchanges of the Nation were closed. Financial and Government officials in New York, Washington and other cities bent their efforts toward development of procedure to permit resumption of financial transactions and business set tlements next week. The banking moratorium movement which started in Ml .^an February 14 finally embraced the big financial in stitutions of Wait Street and La Salle Street early today, and the swift move ment to convert bank credits into cash was quickly checked in most of the re mainder of the country. The holiday period was scheduled to end on Tuesday in Hew York, on Wed nesday in Chicago, and to terminate on either Tuesday or Wednesday in most other large States. Cash Shortage Eased. Reports from over the country de picted a Nation accepting with forti tude anil good cheer an unparalleled experience in the modern industrial era in the United States. In the meantime, shortage* of cash to meet ordinary living expenses failed to develop to any extent, and bantu In a number of localities provided cash to meet pay rolls. Business and commerce functioned with little interference, with the practice of extending credit or ac cepting checks widespread. The New York Clearing House and as sociations of banks In other cities met to develop methods of resuming banking operations next week. Plans similar to those adopted in the money shortage of 1907, in which clearing-house certifi cates were used in the place of cash, were widely discussed. The effect of the virtual standstill in banking in the United States, world's richest Nation with more than a third of the world's supply of monetary gold, brought International financial transac tions to a standstill over much of the world. In Ix>ndon, long the world center of international finance, quotations on American dollars and all other foreign exchanges were suspended. as well as quotations on gold. As a result, foreign exchange transactions were at a stand still in Paris and many other capitals It was the first time the dollar had not been quoted in a number of leading capitals since the Civil War. Withdrawals Checked. The New York and Chicago Federal Reserve Banks, as well as most of the other 10 reserve institutions, closed owing to general bank holidays, although 110 formal order was issued from the Fed eral Reserve Board at Washington. The Federal Reserve Banks of Cleveland. San Francisco and Richmond were open, however, and the Kansas City Reserve Institution transacted bu'iness lor banks In its territory that were open. The closing of the New York Reserve Bank checked the large withdrawals of gold for hoarding and export which had developed. The Subtreasury In New York was open and redeemed Treasury certificates for gold as usual, although it paid out metal only in ta,000 bars, doing no business in coin. Leading New York bankers held meet ings at the New York Clearing House and elsewhere today, after sessions through last night and early this morn ing. resulting in Gov. I-ehman's procla mation ordering a two-day legal holiday, which was at 4 am. The net demand deposits of the 27 clearing house banks were reduced by $409.944 000 in the week ended today, the weekly clearing house statement showed, still leaving the huge total of $5,403,124,000. Bankers explained that the rush to convert bank deposits into currency had reached a point which taxed physical facilities to meet it. although the re sources of the large banks and the Fed eral Reserve system remained enor mous. National Gain Seen. A statement by the clearing house declared that the New York banks were in such condition that they "could, through facilities of the Federal Reserve Bank, pay on demand every dollar of their deposits," but It had been decided to call a temporary halt for the benefit, not of New York primarily, but of the Nation a.s a whole." Banking authorities said there was no lack of currency-issuing facilities or of actual currency, but that it had be come Imperative to check the rush for cash to preserve the long established and efficient practice of doing business through bank-check clearances and prevent an excess of currency which would not be needed when hysteria had subsided. The metropolis received the news of the holiday calmly, realizing that the steps were taken In the Interest of th§ general welfare and that the big banks are actually in strong condition. One j bank honored blanket pay-roll checks until the noon closing hour, and persons who sought access to safety deposit boxes, which had swallowed" up large i amounts of currency this week, encoun tered no difficulties. Gov. Lehman said he did not object to such withdrawals. Transacted by Checks. Financial authorities explained that 90 per cent of the Nation's business was normally transacted throngh the medium of bank chacks. and pointed out that total currency in circulation, even at the record figure of $6,720,000. 000 shown in this week's report, was only a fraction of the total of more than $40,000,000,000 in bank deposits in the country, so that it was apparent the hysterical movement to convert de posits into cash had to be checked, un less currency were to be extended to ridiculous levels. Suggestions for resuming banking business dealt chiefly with methods of increasing check circulation, and the records of 1907, when a real shortage of money necessitated various expedients, were closely scrutinized. At that time, clearing house associations in New York and other leading cities issued clearing house certificates, which were used to settle transactions and to some extent circulated as currency. The present problem was seen as re flecting chiefly a lack of confidence, rather than a lack of currency, or a lack of banking facilities. If currency were brought out of hoarding, it wa.i explained, there would bs more than enough, for the amount Issued is now far above that outstanding in the hal cyon days of 1928 and 1929. A statement was Issued by the Fed eral Reserve Bank, supplementing yes terday's ctatement, which resulted in a sharp reduction of the gold decrease reported yesterday. Friday's report, showing transactions up to 3 p.m.. had Indicated a loss of $116 439.600. through earmarkings for foreign account and exports, the largest reduction ever re ported for a single day. It was re vealed today, however, that after 3 p.m. there had been a decrea.se in gold held for foreign account of $39,754,500. re sulting in the addition of that amount to American stocks of metal. Huge Reserve Remains. This left the Nation's gold stock at the end of the week at about $4,245, 000.000. more than a third of all the monetary gold in the world, and about $336,000,000 above the level reached last June 15, as a result of the large loss of metal during the Spring of 1932. Today's holiday was the first emer gency action, which stopped gold trans actions, since exports of the metal were THE CONGRESSIONAL CHERl'BS. FEDERAL RESERVE NOTES ARE RUSHED Extra Printing Shifts Work to Meet Demand for Cur rency. Day and night shifts are at work at the Bureau of Engraving and Printing of the United States Treasury turning out Federal Reserve notes to ^neet the demand of the Nation for currency In place of checks, which have been the business medium before moratoria were declared in a number of States. Officials of the Treasury would not discuss the bureau's work, however. It was known that the bureau previously had been working on a big furlough program, on account of a shortage of wort. Under this program various skilled artisans in the bureau were given furlough days each month in order to keep the whole number em ployed. In some crafts it was known to have mounted to as high as eight fur lough days a month, off dutv. without pay. This was done to spread the work out among the whole personnel to pre vent dismissals and keep within appro priations. The Bureau of Engraving and Print ing was the pionter in use of the fur lough. The practice has been in use generally since the war to prevent dis missals and keep the skilled staff in UftCfc. Demand Increases. Last week the demand for Federal Reserve notes Increased $579,000,000, and with additional States declaring bank holidays, making checks useless as a business medium, the demand tor more currency increased. At the close of business on March 1 the total Federal Reserve circulation amounted to $3,579,522,000. The Treas ury's statement for the same day showed there was outside of the Treasury or in circulation a total of $3 854.600,775. Against the amount of Federal Re serve notes in circulation the Govern ment held $2,180,967,000 in gold deposits by the Federal Reserve banks, which was about $750,000,000 more than re milieu oy law. A Federal Reserve bank note must be backed by HO per cent in gold and the remaining CO per cent in either eligible j paper or United States Government ob ligations. In addition to the gold held against Federal Reserve currency the Treasury had SI.032.589.000 in commercial paper and $661,900,000 in Government securi ties. Latest Statement. The latest circulation statement of the Treasury for the end of January showed there was outside of the Treas ury $1,258,413,200 in gold coin and bul lion and $1,321,933,749 In gold certifi cates. restricted in the war years, or from October, 1917, to June. 1919. The closing of the Stock Exchange today was the first time trading has been halted in this market by economic circumstances since 1914. when the war' scare forced suspension, although the bull market of 1928 and the selling paniQ late in 1929 forced restriction of trading hours to permit clerical forces to catch up with the work. Extended week ends were also taken In Novem ber of 1929 to give rest to clerks who had been working night and day. After the closing of the exchange at the end of July. 1914. no trading was permitted until November 28. when re stricted dealings in bonds were resumed, and December 12. when trading was again started in stocks. No parallel, however, was seen In Wall Street between the present situation end that at the outbreak of the World War. At that time, all of the markets closed In Europe, and most of the rest of the financial world turned to New York as the only place in which to liquidate. Closure was to prevent serious collapse of prices by foreign selling. The market has not been seri ously taxed recently, however, and In three of the last five trading sessions, stocks advanced. While official com ment was withheld, resumption of trad ing was planned for next Tuesday, at the -expiration of the New York bank ing holiday. Policy Ii Traditional. Exchange officials have traditionally resisted suggestions that trading be stopped. Oreat Britain's departure from the gold standard In September of 1931 again left the New York mar ket the only major one open. Severe pres sure was brought upon exchange of ficials to suspend trading to prevent a flood of selling from Europe. But the market had grown since 1914. and met that emergency satisfactorily. Not even in 1907 did the exchange close, or dur ing the crisis of 1893. It did close for 12 days in September of 1873, how ever. coincident to the failure of Jay Cooke & Co., promoters of the North ern Pacific Railroad.. The only parallel in recent times for the almost Nation-wide bank holiday in the United States was the experience of Oermany in July. 1931. But the contrasts are marked. Financial au thorities pointed out that the much stronger position of the United States should lead to prompt resumption of normal business, even though the banking structure in this country is less concentrated and unified than in Germany. The complete holiday in the Reich lasted for a week In July. 1931. Her gold reserve had been drained to only about $340,000,000, the country was severely in debt abroad, and had suf fered a serious drain of capital into foreign financial center*. The United States, on the other hand, is the world's richest nation, a creditor of much of the rest of the world, and has the an ormous sum of $4*745,000,000 in mone tary gold. Offers Plan to Reopen Banks William S. Morehead, Pittsburgh Attorney, Proposes Segregation of New Deposits in Trust After Bank Limits Withdrawals. William S. Morehead of Pittsburgh, a prominent Pennsylvania attorney, who it counsel for several large banks in that State and who has taken part, in an advisory capacity, in the drafting of national banking legis lation, presented to the controller of the currency last Friday a jkan that, in his opinion, would permit the im mediate functioning on a new bas-s of the banking institutions now sus pending or restricting withdrawals. At the request of The Star he has telegraphed to this newspaper an outline of this plan. It appears below. BY WILLIAM 8. MOREHEAD. YOU have requested me to tele graph you a brief outline of a plan to be followed by banter placing restrictions on with drawal of deposits which I pro posed to representatnes of comptroller of currency Friday. The mam featufea of this plan are as follows: The board of directors of the bank finding it advisable to restrict with drawals should adopt a resolution lim iting the withdrawal of existing de posits to such percentage thereof as is decided upon, which should not exceed the ratio of cash or its equivalent to deposit liabilities and any other in debtness. Restrictions on withdrawals and the right to withdraw the prescribed percentage .should apply both to check ing and savings accounts. New de posits received after the restriction date shou'd be segregated and held by the bank in trust for new d positors sub ject to withdrawal in whole or in part by such depositors or in accordance with their written orders or checks. The trust fund so created should be held in cash, on deposit in Federal Re serve Bank of district wherein restrict ing bank is located, or invested in United States Government bonds. Some investment feature is necessary to eliminate the effects of hoarding cur rency in the trust fund. The trust fund for new depositors must be physically segregated and a separate department for new deposits would be advisable That part of the trust fund deposited In the Federal Reserve Bank should be carried in a separate account prop erly designated and not applicable to payment of anv loan* or discounts theretofore or thereafter made by the depositing bank. -Arrangements should be immediately made whereby all Fed eral Reserve Banks can so receive and carry such deposits. At the time of making new deposits a card should be signed by depositor or his pass book stamped with appropriate words im pressing the trust on new deposits made after reitriction date. Checks on new deposits 'should be appropriately stamped to indicate intended with drawal from trust funds. In my opinion, the prohibition In the Federal Reserve act against a national bank receiving in Its trust department deposits subject to check applies to or dinary deposits creating the relation of debtor and creditor and not to deposits under a trust in a separate depart WiCiil. National or State banks not having trust powers may require validating legislation to cure ultra vires acts, but absence of statutory trust powers should not affect valdity of trust while in effect. National banks putting the plan in effect should immediately report to controller of currency for approval of the plan and State banks should similarly repcrt to State banking au thorities. Restricting banks should make every effort to liquidate their general assets and when necessary and possible to re place frozen assets bv liquid assets so that restriction on withdrawals may be eliminated as soon as possible, ether wise, litigation might force receivership A Government guaranty of new de posits under this plan ccruld be made without danger of substantial loss de pending on the latitude of investment of trust funds. Church Welcomes I. O. U.'s With Texas Banks on Holiday By the Associated Press. EL PASO. Tex., March 4 — Lack of cash, because of a bank holiday in Texas, will be no ex cuse for non-attencance at church services here tomorrow. The First Baptist Church an nounced today that I. O. U.'s will be received gladly when the col lection plate Is passed around. ECONOMIST IS HELD German Government Asks Harvard Lecturer's Deportation. BOSTON. March 4 UP}.—Dr. Joao P. Normano, former lecturer on eco nomics at Harvard University, today was ordered held for extradition to Germany by United States Commis sioner Edwin C. Jenney. The German government asked his return on the ground that Dr. Normano was Dr. Isaak Lewin. fugitive former Berlin banker, wanted in that country for an alleged swindle involving |750, 000. 'acts to help citizens LEFT WITHOUT MONEY New Orleans Mayor Calls on Food Dealers and Utilities for Easy Credit Policy in Closings. By the Asforltted Pr».«» NEW ORLEANS. March 4—Acting to aid citizens embarrassed for cash. Mayor T. Semmes Walmsley today called dealers in foodstuffs and repre sentatives of public service corporations to City Hall, suspended the Sunday store-closing law and secured pledges that a liberal policy of credit would be practiced during the Louisiana bank holiday. I Mayor Walmslev said the city welfare agencies would tecure necessary sup plies for those without established credit and that public service com panies had agreed not to suspend serv ice for non-payment of bills. Bv proclamation of Lieut. Gov. John B Fournet, acting Governor, Louisiana's banking holiday, originally ordered for March 2, 3 and 4. today was extended through Monday, March 6, and was made mandatory. The New Orleans Cotton Exchange announced it* closure order for Thurs day, Friday and today, had been ex I tended "until further notice." History in the Making Inaugural Editions Eitfttitig anh &utihag fclar Mailed, Postage Prepaid, Anywhere in United Statei, Mexico or Canada March 3, 4 and 5. ... 25c March 3 Edition Alone (Mailed) 5c March 4 Edition Alone (Mailed) 5c March 5 Edition Alone (Mailed) 15c Be *ure to buy the inaugural issues of The Star if you would obtain a comprehensive, colorful and authentic perspective of the inauguration of Franklin Delano Roosevelt as President of the United 8Utea. Today's edition contains a wealth of information concerning the big ceremonies yesterday, pictures of notables and vivid photographs of the Inaugural program. In addition to a complete resume of the news in print and pictures, it contains a special Inaugural magazine and rotogravure section. The thr*« inaugural issues will be mailed promptly to any address in the United States, upon order. Send list of names and addresses, accompanied by 25 cents for each name, to The Star, 11th Street and Pennsylvania Avenue. Subscriptions Will Be Taken at Star Want Ad Stations No Telephone Orders or Cher get Tiny Advance Guard Finds Capital Deserted by Chinese. By tin Associated Prus. CHINCHOW, Manchuria. March 4 — A handful of Japanese soldiers, push ing through a blizzard from Pingchuan, marched Into Jehol City at 11:30 o'clock this morning and took it over without a struggle. Only 128 men were in the advance guard which was first to reach the ob jective of Japan's invasion, but they raised the flags of Japan and Manchu kuo without firing a shot, then pushed on southward toward the Great Wall ol China. Tang Yu-Lin, governor of the prov ince and commander of its army, had fled. The defending troops were in ragged retreat. Most ol the people had left, taking with them all they could carry of their own goods. fin Short Battle. Behind the vanguard Oen. Kawa hara's 16th Infantry moved up toward the capital. This main body had been checked briefly by a force of 3.000 Chi nese 4 miles from the capital. There was a short battle, the Chinese were routed, leaving behind artillery, ma chine guns and <avalry mounts. Behind the 16th came the 14th In fantry under G n. Hattori. This force scattered the Chinese defenders soutn of Lingyuan and captured the pats at Lenkow. in the mountains between Shanhaikwan and Koupeikow. It took only 11 days to conquer Jehol and the campaign. Japanese officer! said, cost much less than they had an ticipated. It also required less time, for the base headquarters here had pre dicted Jehol City would fall by March 10. Wall to End Advance. The immediate work in hand now in volves driving the remnants of armed Chinese out of the province. This will require an advance beyond the capital dear to the Great Wall, which now will be the southern boundary of Manchu kuo, increased In extent by the annexa tion of Jehcl. Beyond the wall the Japanese say they do not intend to go. "We have no desire to pass the wall.'" an army spokesman said today, "un less we are compelled to do so for the protection of Japanese who live :n Peiping and Tientsin. If their safety is net threatened by the Chinese, this con flict is as good as over now." GEX. TANG IN FLIGHT. Life Threatened by Chinese ag Well u by Invaders. PEIPING. March 5 i/P>.—Dominating Jehol Province because of their occu pation of the capital. Jehol City, Japa nese forces have planted their flags along the Great Wall of China. Gen. Tang Yu-Lin. governor of Jehol, whose defense collapsed, today was a fugitive at Luanping-Hsien. His life is threatened if he crosses the Great Wall—the southern boundary of Jehol— or equally in danger if he falls into the nands of the invading Jrpanese. Gen. Tang's flight was reg:ided here as treachery and Marshal Cnang Hsiao Liang, North China war lord, issued an order for the governor's arrest on a charge of desertion. It was said here today that Marshal Chang is determined the governor's troops must redeem his promise to fight to the finish, and that measures were being taken to reorganize them. Until today no one knew where the governor had gone. Continue Fighting. It was also understood that groups of Marshal Chang's troops continued to fi'ht desperately today. Portions of his army near Koupeikow Pass are being provisioned by a supply "train'' of rick shaws from Peiping. These carts last night traveled over the mountainoui country without pause. Chinese authorities. Including Mar shal Chang's headquarters, admitted that a party of 128 Japanese soldiers took possession of Jehol City and that another small party of Japanese had pushed southward to a spur of the Great Wall, where th?y planted the Japanese fl3g. Inhabitants of Jehol were said to have welcomed the invaders and to have de nounced the regime of Gen. Tang The small Japanese force broke through the defense between the capital and Pingchuan. but the main defense, between Lingyuan and Koupeikow. re mained unshaken, a statement irom Marshal Chang's headquarters sa.d. Chang has an army of 20.000 men in Jehol. concentrating at Koupeikow, to keep Tang's army and the Chinese ir regular forces from descending into China proper. This is a precautionary measure to prevent disorders in North China which would provide the J a pa ruse with an excuse to push their ad vance south of the Wall. Ordered to Keep Fonts. Altogether 50.000 of Chang's men are between Lingyuan and Koupeikow with order.; to stay there until the central government at Nanking directs their withdrawal. Just before the arrival of the enemy early this morning Jehol City was so peaceful that it v.as hard to believe armies were fighting at its gates. The populace knew that surrender was inevitable. Most of them had left during the last few days, pushing ahead of them wheelbarrows piled with their few belongings, riding south on bicycles, in rickshas, in pony carts or automo biles. Hundreds started the long hard journey afoot. Most of the local offi cials had gone, the post office was closed and the administrative offices deserted. Word of the capture of Pingrhuan came yesterday afternoon and that eve ning the first of the retreating Chinese army straggled into the city. Tang Yu-Lin. in better days the "opium king." but now only a weary defeated general, left by motor car without revealing his destination. When a correspondent visited him he made no attempt to conceal his dis couragement. For several minutes he sat silent, gazing through a window. "I'm all in." he said at last; "I am in a difficult position. I don't even know where my troops are." MARYLAND BANK OPENING DELAYED Holiday Extended at Least Until Tuesday Because of Other States. By a Staff Correspondent of The Star. BALTIMORE, Md.. March 4 —Com plicated by the extension of the bank ing holiday to almost Nation-wide scope, Maryland's banking holiday will be extended at least until Tuesday, It deve'ooed tonight, when Gov. Ritchie officially nroclc lined Monday to be a legal holiday. Closing of the New York banks was tli1 most disturbing feature to the bankers of Maryland and most other States, as practically all the large State bpnks carry balances in Manhattan in stitutions. Gov. Ritchie and his advisors v,-ere considering the Maryland problem In the light of the latest developments, hoping to be able to open the 8tate's banks, under the emergency act Just pat'ed by th* Legislature, with the least possible delay.