Evening star. [volume], March 06, 1933, Page A-4, Image 4

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
NEW YORK BANKS
HY TO REOPEN
Action Expected Tomorrow
as Financiers Complete
Scrip Plans.
iContlnued Ffom First Page/*
open, with staffs standing by, but ex
change officials could reach no decision
u to when trading could be resumed
pending further developments In re
itorlng banking operation.
The banking system bent its efforts
toward perfection of a plan to resume
modified operations to finance the Na
tion's commerce, pending the conven
ing of Congress for emergency legisla
tion on Thursday.
Preparations were rushed to take ad
vantage of President Roosevelt's proc
lamation declaring a four-day bank
holiday starting today, but permitting
the resumption of banking activity with
clearing house certificates in place of
currency.
Huge supplies of certificates had al
ready been printed by the American
Bank Note Co.. In denominations of $5.
$10, $20 and $50. and every effort was
being made to put the new system Into
operation as quickly as possible. The
mechanical difficulties were enormous,
but by Wednesday at least, or possibly
earlier It was hoped that banks in a
number of cities would be paying out
the new "money."
Gold Window* Closed.
In the meantime, gold windows at
the Federal Reserve banks, the Treas
ury and subtrtusuries were closed. In
keeping with the President's proclama
tion. and all dealings In foreign ex
change and international dealings in
gold, silver or currency were at a
standstill in the United States. The
principal foreign financial centers
struggled with the problem of trying to
resume International payments, which
vpre completely disrupted with official
quotations on the dollar lacking.
Some financial authorities were In
clined to regard the United States as
"technically" off the gold standard, al
though this was denied by Treasury .
Secretary Woodin In Washington.
The Wall Street security and com
modity markets and the Chicago wheat
pit remained closed under the second
day of the banking holidays proclaimed ;
by the New York and Illinois Governors
early Saturday.
The security and commodity ex
changes were not Included In Presi
dent Roosevelt's proclamation and con
sideration was given in financial quar
ters to the desirability of resuming
trading before the national holiday ex
plres. It was recalled that the New
York Stock Exchange continued to
function during the banking crisis in |
1907, when clearing house certificates :
were used.
If trading were resumed, and the
United States were regarded as off the
gold standard, or likely to devalue its
currency, financial experts argued that
commodity and share prices should
boom, but Secretary Woodin's emphatic
denial that the country was leaving the
gold standard tended to dash that
theory.
Given Special Status.
A country generally is considered on
a gold standard when its currency can
be redeemed in gold on demand, al
though definitions are varied, and in
volve many technicalities. Although
during the holiday American paper
money is clearly not redeemable in gold,
some bankers pointed out that it was
merely a special situation during the
four-day holiday, such as exists on
Christmas day or any other holiday in
which gold was not being paid out, so
that it was idle to conjecture as to
whether the country was technically
"on gold."
The situation differed from Oreat
Britain's suspension of gold payments
in September of 1931, for that was a
definite suspension for an unlimited
time, while the current suspension in
thill country is specifically for a four
day special holiday period, pending the
enactment of a measure, as yet unre
vealed, to restore stability.
The British suspension of gold pay
ments was followed by immediate for
eign exchange dealings, permitting the
pound sterling to depreciate sharply
in terms of other currencies, which in
turn decreased its purchasing power
and brought an upturn in prices in
terms of that currency. No enduring
advance in commodity prices in terms
of sterling has resulted, because world i
commodity prices have continued to i
decline. Sterling prices have remained j
about unchanged, however, while prices i
in France and the United States are |
substantially lower than when Great
Britain left the gold standard.
Suspending gold payments, however,
does not necessarily mean a deprecia
tion of the currency. Germany has re
stricted gold payments to a degree
amounting almost to suspension since
her banking crisis in the Summer of
1931, yet with rigid control of foreign
exchange transactions the level of her
currency has been kept virtually stable.
When the international gold trans
actions in this country were stopped last
Saturday by the banking holiday in
New York, which was observed by the
New York Federal Reserve Bank, which
handles these transactions, the country
■till had some $4,300,000,000 of mone
tary gold, or more than a third of the
entire supply in the world. This was
well above the level reached as recently
•s last June.
Confidence Necessary.
Bankers point out. therefore, that
once confidence la restored, the United
States has much more than enough
geld to function as before on the in
ternational gold basis. In ordinary
times gold Is used only as the inter
national means of settling balances.
But for the first time in a generation,
the recent banking crisis prompted
Americans to seek gold coin, and even
gold bullion, and in the last week mil
lions of dollars In the yellow metal
were paid out by the Federal Reserve
banks, and put into safe deposit boxes
by hoarders, aggravating the severe
drain of gold abroad.
The recent reduction In the Federal
Reserve bank's gold reserves would not
have been particularly serious, had it
not come at a time when currency in
circulation was rising at an unprece
dented rate. The reserve system must,
as a general rule, maintain a 40 per
cent gold reserve against Its notes, so
with each dollar of gold that goes out
is removed the backing for $2.50 In
currency. The reserve ratio of the
system, when last reported as of the1
close of business on Wednesday, was I
53 H per cent, or well above the 40 per '
cent minimum, although since then
and the clofe of business Friday the j
ratios of the New York Reserve Bank
alone and some of the others are under- I
stood to have Slipped under the 40
per cent level. The Federal Reserve
act provides, however, tnat the reserves]
may be permitted to run below 40 per I
cent under special arrangements.
COMMITTEES ANNOUNCED
Card Party to Be Held March 17
in Montgomery Club.
Spccia! Dispatch to The Star.
ROCKVILLE. Md„ March 6— Mrs.
Frank Marshall, chairman of the Gen
eral Committee on Arrangements, has
announced the following committees for
the card party to be held in the Mont
gomery County Club here the evening
of March 17 under auspices of the Aux
iliary of the HendeTson-Smith-Edmonds
American Legion Post of Rockville"
Decorations, Mrs. Helen Weedon and
Mrs. Louis J. Ryan; tickets. Miss Lucy
Smith and Mrs. Hugh Thompson: re
freshments. Mrs. A. Ouy Watkins and
Mrs. J. fDan Louthan; prizes. Mrs.
Chaupcey M. Grubb and Mrs. Berbln G.
HMM.
\ ', - •
Epoch-Making Bank Conference Ends
I
Secretary of Treasury Wood In is seen leaving the Treasury after a long Sunday conference with his advisers and
prominent financiers, at which the bank holiday was discussed. Left to right are Secretary Woodin. Adolph C. Miller
of the Federal Reserve Board, Prof. Raymond Moley, financial adviser to President Roosevelt, and A A. Burll.
—Underwood Photo.
Holiday Cheerfully Met
Credit Arrangements Liberal in Financial Centers.
Theaters and Night Clubs Do Rush Business.
Problem of Small Change Is Considerable.
The spirit in which the bank holi
day is being met throughout the
country is shown In the following
dispatches, assembled by The Star
and the North American Newspaper j
Alliance.
NEW YORK. March 6 (N.A.N.A.).—
New York has bowed to the edict of a
I bank holiday with a friendly acquies
! cence that surpassed the hopes of the
I most optimistic.
Despite the forebodings of managers
of restaurants and places of entertain
ment. no one walking along Broadway
would realize that eery bank in the
State is closed. There is money, and
plenty of it, and it is being spent with
the same nonchalance as that of the
normal Sunday night throng, composed
mostly of men and women who work
hard during the week.
The restaurants catering to the man
on the street, who spends perhap> $2.50
once a week for supper for tw. with
dancing and a floor show thrown In, j
have the usual patronage. On Satur- i
day night they were jammed.
Crowd* Throng Movie*.
Every theater offering a good movie in
the Times Square district did as much
business as usual and an audit showed
phenomenal Saturday receipts. There
is no trouble in changing large bills at
the box offices, and while one manage
ment with two great theaters offered
to take checks on New York banks in
payment for tickets, not one was offered
during the day.
Thunderous applause greeted the news
reels showing President Roosevelt mak
1 ing his inaugural address.
Night club managers, while maintain
ing a gay air. would not predict what
would come after midnight, but insisted
the night's receipts were good. The
problem of checks, particularly those
involving additional cash, troubled them,
and it was expected they would function
on a cash basts.
The problem of change for large
bills is considerable. The smaller cigar
stores and neighborhood shops in mo6t
cases decline to change a $5 bill unless
the purchase is of considerable size,
and anything above $10 is out of the
question. Pennies, usually frowned
upon in large numbers, are welcomed
by a "well, it's money."
Check* Practically Worthless.
Checks are practically worthless. At,
hotels or stores, old patrons may se
cure $5 or $10, if fortunate, but the
attitude of a cashier is that of one re
ceiving an I. O. U.
Women with accounts at stores or
dered their foodstuffs in larger amounts i
than usual. The small merchant, fear- j
ing to lo6e an account, saw his stock ;
running low, and no cash coming in
with which to pay the wholesaler.
There was surcease for those in bet
ter circumstances when the depart
ment stores opened today. Large ad
vertisements, sponsored by nearly all
prominent New York department stores,
urged all customers to come and trade
lavishly, and charge everything. Their
attitude is the one concrete evidence
of the value of credit, and theirs will
be the harvest if bills are paid.
Meanwhile, there is no confusion.
There is evident a certain brotherhood
that New York has not seen since the
war. Every one is in the same boat,
and willing to help another. Mingled
with a lilting, "what's the use of worry
ing?" thoughts turn to when the banks
will—or will not—open.
California.
Lbs ANGELES, March 6 — Having
endured with cheerful fortitude the
three-day bank holiday first decreed
for California by Gov. Rolph, this city
awaits with optimism the future devel
opments of the situation, with news of
the extension of the holiday until
Thursday.
Plans pending for the issuance of
scrip by the Los Angeles Clearing House
Association have the widespread in
dorsement of merchants and manu
facturers. indicating the belief that this
method will be a chief factor in keaping ]
business and employment on an even ;
keel. Scrip issuance is contingent on
State legislative action on banking j
, affairs, but there is a general feeling
, of confidence that it will be an affec- '
| tive way of coping with the emer
: gency.
There is no lack of confidence in
I Los Angeles banking Institutions and
I the sentiment generally is that on the
steps taken and contemplated will come
a materially improved condition in
i business throughout the State. The
appearance of principal business dis
tricts over the week end indicated busi
ness as usual. Credit- extension and
cashing of checks whenever possible
are sustaining the spirit of courage and
hopefulness.
Georgia.
ATLANTA. March 8.—For the most
part, bank patronsjn Georgia are ac
cepting the holiday philosophically.
One couple who. in anticipation of the
holiday, had withdrawn $7,000 in cur
rency from an Atlanta bank, put it
back the next morning, before the Gov
ernor's moratorium proclamation was
issued. The banks were scheduled to
reopen tomorrow, but yesterday Gov.
Talmadge extended the holiday to run
through Thursday.
Kentucky.
LOUISVILLE. March 6— Although
business has teen slowed down appre
ciably by the i»ank holiday, the people
take the situation calmly. March 1 a
few employers issued pay checks that
could be cashed. The board of edu
cation stopped payment on $2,000 Sal
ary checks so the restricted money
available might be prorated.
Credit Is being extended freely to
known customers and many business
Arms accept checks for the exact
amount of purchases. All utility com
panies have been accepting checks as
usual There Is plenty of small change
in circulation. Bank employers have
been ordered to advise depositors on
individual problems, such as Insurance
premiums. Instalments and taxes
Banks have been accepting new de
posits and segregating them into trust
funds for unrestricted checking. As a
resul:. new deposits have been noted.
The majority of Kentucky banks
have been restricting withdrawals on
other than new accounts to 5 per cent.
Gov. LatToon has extended the original
four-day holiday through March 11.
Maatachuselts.
BOSTON. March 6.—Boston faced
tht. bank holiday situation without any
fuss and evtn with a kind of smile.
The public psychology was amazing
No crowds or even groups gathered
around elthsr the banks or the news
paper bulletin boards, as occurred In
the crash of 1929 and again In isolated
bank closings at the end of 1931.
There were, of course, minor Incon
veniences. such as a lack of small coins.
Change pas short. A newspaper row
restaurant refused to fh&nge $100 bills.
In the absence of banking, trade and
business accommodation fell back on
personal credit. Old customers of
grocery stores paid for groceries with
checks or were allowed to charge the
amounts. Hotels took checks for the
amount of the bill—no more. The
larger stores agreed upon a policy of
accepting no checks whatsoever.
The theaters and night clubs did the
largest business in week*.
Ohio.
CLEVELAND—Cleveland accepts the
bank holiday cheerfully. Depositors
thronged the downtown banks the first
day of the restriction on withdrawals,
and long lines stood before the cashiers'
cages drawing out the small part of
deposits made available. Reliable esti
mates were that S5.000.000 was drawn
that day. with no disorder and very
little complaining or bed temper.
The next day banks had little more
than their usual crowds, and with
drawals were estimated at about a
tenth of the day before. The excite*
ment was mostly over.
Retail business announces that "usual
lines" of credit will be maintained. One J
of the theaters promises that checki 1
for tickets, though drawn against ac
counts not Immediately negotiable, will
be accepted.
With hardly an exception, business
and industry of this city met the flwt
week's pay roll of the emergency in
cash, generally by building up funds in
new bank deposits, specifically ex
empted from the restrictions of the
emergency bank laws.
Most Cleveland banks started th?
holiday by limiting withdrawals from
all accounts to 5 per cent of the total
balance. Limitations of 1 or 2 per
cent were in effect at a few banks.
South Carolina.
CHARLESTON. March 6.—Operating
under moderate restrictions designed to
prevent drainage of cash resources Into
other States where banks are closed
and to conserve resources for conduct
ing business against withdrawals for
hoarding, banks of Charleston func
tioned Saturday completely In all busi
ness relations and cashed checks for
such sums as were considered actuallv
needed by Individuals. Other South
Carolina banks followed Charleston's
lead.
The State was among tbc few doing
business on a cash basis. Depositors
were allowed to withdraw sums to cover
immediate needs. Checks from outside
were not accepted.
Two banks in Spartanburg announced
they would observe a holiday until pas
sage of Federal legislation for banking
relief. The National Exchange Bank
In Chester closed "until further order*
from the controller of the fcurrency."
Otherwise the banking situation In
the State appeared good. Pay rolls
were met In cash.
Wisconsin.
MILWAUKEE. March 6.—Merchants
are planning liberal extensions of credit
during the moratorium to keep business
moving. The churches In Milwaukee
announced that collection plates would
not be passed during the moratorium.
The Wisconsin holiday, proclaimed
for 14 days, followed slow runs on
banks In several parts of the State,
particularly In the Milwaukee area.
Financial leaders believe the situation
will adjust itself quickly. The situa
tion in this State Is ascribed to na
tional tenseness and not to any ab
normal local condition.
(Coprrlcht. 1 H.%'1. by North American News
paper Alliance, Inc.)
MANILA BANKS OPEN
Operations Resumed With With
drawal! at Normal Level.
MANILA, March 6 —Banking
operations were resumed at 10 a.m.^ to
day as usual, with withdrawals normal,
but foreign exchange dealings were sus
pended pending resumption of operation*
in the chief monetary centers abroad.
Drafts on American banks were sold,
but with provisions covering delays due
to the bank holiday in America,
NATION HON
AS CASH VANISHES
People take Good-Humored
View of Situation—Look
for Scrip.
BY RAYMOND CROWLEY.
Br the Associated Presi.
NEW YORK. March 6 —Quips, grlna
and tall stories were on the lips of
Americans today as tney went to a well
they had not tapped since war days.
It was a well of extra resourcefulness,
of Ingenuity, of good humor. Human
life, in spite of the shortage of cash,
was finding ways of carrying on—as it
has a way of doing always.
Even before President Roosevelt,
clothing himself with the powers of a
wartime law, took quick steps prepar
ing the way for scrip, the idea of scrip
was racing through the country, and
communities in many scattered sections
were arranging to have it printed.
Lar|( Bilii I'mIm.
Tales of millionaires beseeching but
lers for a spare dime, of folk with $100
bills being snubbed by change-guarding
clerks went the rounds. Ladles who
used to talk about their operations now
had a new topic—of how that nasty
grocer would not give them change for
$20 when they bought a 10-cent can of
beans.
Prom the top to the bottom of the
social scale people facing inconvenience
grinned and bore it. Former President
Hoover. Just a few hours out of the
White House, found himself with only
a small amount of cash—but was getting
along.
•Gov. Pinchot of Pennsylvania had
jilst 95 cents in his jeans, but there was
gasoline enough in the gubernatorial
motor to carry him buck home from
Washington.
The movie folks in Hollywood had
their fun. That wag. Jack Oakle.
issued his own scrip, reading, "Compli- i
menu of Jack Oakie. who owes you'
blank dollars and hopes you get it." I
At Dallas. Tex. Bernice Claire and
Alexander Gray, musical comedy artists,
arranged to pay their hotel bill by sing
ing for other guests. Like millions of
others, they have money—but it is In
banks. I
A New York hotel, finding itself short I
of cash, sent a messenger to churches ]
to gather the contents of collection;
plates. Business on Broadway boomed
as some theaters accepted checks for
tickets. Subways had a plentiful supply
of nickels for the time being, but were
considering what to do about scrip.
You can't put it in a turnstile.
Railroads, hotel and airplane lines. In
many cases, took checks from well
known customers. A Pasadena hotel,
besieged by millionaires without the
price of a shave, started to print its
own scrip. Telegraph wires hummed as
people sent cash to relatives.
New Yorkers laughed when a naive
business man complained that his bank
should have warned him it was going
to close, so he could draw out a little
change for his till. But in a Chicago
suburb a bank had done just that.
John M. Nichols, president of the
bank which advertises that "When
plainer statements are made we will
make them." said:
"We've been telling people who asked
about the possibility of a moratorium
to come in and withdraw iunds to tide
them over. A lot did, and then
thanked us."
Automat managers debated a weighty
problem—how to prevent people from
changing $5 bills Into nfckels and then
going out without eating. Police in
many cities arranged to allow people
to place their money in station houses
for safekeeping.
Charge Accounb Solicited.
In New York the Daily News fixed it
so that boxing fans could pay lor 50
ccnt tickets to tonight's "golden gloves"
semi-finals by presenting merchandise
Instead of cash. Anything from cans
of tomatoes to brassieres was good—all
the cash the fan had to have was a
nickel for the tax. Many department
stores urged customers to make full use
of charge accounts.
"Prince Michael RomanofT," other
wise known as Harry Gerguson, ex-pants
presser, watched the situation with in
terest. "A great many people's checks,"
he is reported to have tofd a New Yijrk
hotel cashier, "are now as good as
those of a great many others.
U. S. EMBARGO ON GOLD
TO AID CANADA'S MARKET
Dominion to Xake Direct Pay
ment* Instead of Usual Trans
fer Through. New York.
Bit the Associated Pre»«.
TORONTO, March 6.—Charles Mc
Crea, Ontario minister of mines, said
today he thought the embargo placed
on shipment of gold by the United
States would act as a stimulant on the
Canadian gold market.
One banking authority said the em
bargo would necessitate direct payment
of Canadian debts to the United King
dom rather than transfer of funds
through New York, which has been cus
tomary. British debts to Canadian
concerns would have to be similarly
routed, he said the change could be
made without difficulty.
S. H. Logan, general manager of the
Canadian Bank of Commerce, said the
embargo would have no harmful effect
on Canada.
PAY ROLLS TO BE
MET, m WOODIN
Scrip and Cash Both to Be
Made Available Dur
• ing Holiday.
(Continued From Writ Page.)
out any money, the Goverrilnent Mint
at Philadelphia was operating as usual.
Twenty dollar gold pieces and pennies
were being minted.
Bainey Calk Caucus.
Representative Ralney, the next
Speaker of the House, summoned a
Democratic caucus for Wednesday to
set up the controlling Ways and Means
Committee for the special session on
Thursday.
The governors of the New York Stock
Exchange appointed a special commit
tee to decide if the market should re
open tomorrow.
Oovemors of the Omaha Grain Ex
change voted to open the market today,
trading on the buis of Chicago May
option, settlements to be made on the
May price bAsls when the Chicago
futures market opens.
Everywhere the attitude of the people
was one of "watchful waiting."
The President, In his proclamation
issued under the war-time powers con
tained in the trading with the enemy
act of 1917, halted absolutely the flight
of gold from tills country and from the
Treasury and the banks.
Two Courses Outlined.
At the same time he authorised the
Secretary of the Treasury, under the
President's approval and under luch
regulations as he may prescribe, to p.V
mlt the banks to perform "any or all
of the usual banking functions."
Two courses were outlined by the
President in nis proclamation which
are expected to be followed by the
Treasury Department in the Issuance
of regulations permitting modified
banking
The first was to "direct, require or
permit the Issuance of clearing house
certificates or other evidences of claims
against assets of banking institutions."
The second was "to authorize and
direct the creation in such banking in
stitutions of special trust accounts for
the receipt of new deposits," subject to
withdrawal without any restriction, to
be kept separately In cash or on de
posit in the Federal reserve banks or
Invested In Government obligations."
The second proposal is designed to
bring hoarded money back into the
banks and to reinsplre confidence in
the banks.
The hope was expressed that the
Federal Reserve Banks would remain
open and arrangements could be made
with them to obtain cash needed. Offi
cials of the post office were In con
ference with the Federal Reserve Board
in regard to this matter.
At the Treasury Department checks
drawn on the Federal Government, for
whatever purpose, were today being
paid in cash.
Discussing the situation at the Treas
ury Department. Mr. Woodln pointed
out that the President's proclamation
was Issued late last night, under date
of March 8. and that there were many
details which had to be worked out so
that pay rolls can be cared for.
"Every community has a different
idea of how things should be handled,"
he said. "There will be mediums of
exchange to care for all necessary
things. We hope to have everything
fixed today."
Given Brood rower*.
The Secretary Mid, too. that issuance
of clearing house certificates to be used
in the place of cash would be local in
each instance, and that the same would
be true of scrip. There was insufficient
time, he said, for the Government to
issue a uniform scrip. However, he In
sisted that some medium of exchange
would be available within a short time
to the entire country. Efforts would
be made Immediately to work out a
plan by which checking accounts would
be workable and this medium of busi
ness could go forward.
The President s proclamation of the
bank holiday gave to Secretary Woodin
practically unlimited powers to limit
the bank holiday or to make the shut
down of the banks complete.
While the President's proclamation
placed an embargo on gold and pro
hibited the earmarking of gold for for
eign account, and in effect put an end
to payments In gold for the time being.
Secretary Woodin emphatically de
clared that the United States has not
been taken off the gold standard.
Suspension of gold payments was
held in some quarters practically to
have the effect of removing the gold
standard. But It was pointed out that
the suspension is temporary, and that
nothing has been done really to disturb
the gold standard.
Oib Extend Holiday.
The banking holiday proclaimed by
the President runs through Thursday,
the day on which Mr. Rooaevelt - has
summoned the new Congress to meet
at noon In special session. If It be
necessary, using the same powers grant
ed him under the trading with the
enemy act, the President can extend
the holiday, with such modifications
as he deems fit.
President Roosevelt. however, has in
preparation legislation dealing with the
banking situation which he will submit
Immediately to the Congress on its
opening. The congressional leaders are
planning to expedite the consideration
of this legislation.
The President sat down in conference
with the Governors of States today to
talk over the banking situation. These
Governors had come here for the inaug
ural celebration Saturday, and the
President met with them in the White
House soon after he had returned from
the Capitol where he attended the fu
neral -services for the late Senator
Thomas J. Walsh of Montana in the
Senate chamber. Senator Walsh was
to have been Attorney General In the
Roosevelt cabinet.
President Roosevelt has indicated
that the new Congress will be called
upon to deal first of all with emer
gency banking legislation. Later will
come permanent bank reform legisla
tion.
The emergency legislation, it Is ex
pected. will be rushed through bath
houses of Congress.
Senator Robinson of Arkansas. Demo
cratic leader, said that he expected
the emergency legislation to authorize
the use of clearing house certificates
by banks that are in moratorla, to the
extent of their liquid assets. He added
that it would look, too, to the segrega
tion of new deposits.
It has been urged in some quarters
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To Make Sure of Gawler Service, Remember
to Call NAtionar 5512-5513
Joseph Gawler Sons, Inc. 1
Established 1850
1750-52-54 Pennsylvania Ave. N.W.
GHAPEL LADY ATTENDANT CREMATION!
* I *° —Awct omci |
Bank Proclamation Text
President Roosevelt, in View of National Emergency,
Orders Bank Holiday From March 6 to March 9,
Inclusive, Throughout the United States.
full text of President Roose
elt's proclamation on the bank
ig situation follow*:
Whereas there hare been
heavy and unwarranted with
drawals of gold and currency from our
banking institution* for the purpose of
hoarding: and
Whereas continuous and increas
ingly extensive speculative activity
abroad in foreign exchange has re
sulted in severe drains on the Na
tion's stocks of gold; and
Whereas these conditions have
created a national emergency; and
Whereas it is in the best inter
ests of all bank depositors that a
period of respite be provided with a
view to preventing further hoarding
of coin, bullion or currency or spec
ulation in foreign exchange and per
mitting the application of appro
priate measures to protect the in
terests of our people; and
Whereas it is provided in section
S (B) of the act of October 6, 1917,
(40 statute of limitations 411) as
amended, "that the President may
investigate, regulate, or prohibit, un
der such rules and regulations as
he may prescribe, by means of
licenses or otherwise, any transac
tions in foreign exchange and the
export, hoarding, melting, or ear
marking of gold or silver coin or
bullion or currency • • •" and
Whereas it is provided in sec
tion 16 of the said act "that who
ever shall willfully violate any of
the provisions of this act or of any
license, rule, or regulation issued
thereunder, and whoever shall will
fully violate, neglect, or refuse to
comply with any order of the Presi
dent Issued in compliance with the
provisions of this act, shall, upon
conviction, be fined not more than
110,000. or. if a natural person, im
prisoned for not more than 10 years,
or both. • •
Now, therefore. I, Pranklin D.
Roosevelt, President of the United
States of America, in view of such
national emergency and by virtue of
the authority vested in me by said
act and in order to prevent the
export, hoarding, or earmarking of
gold or silver coin or bullion or
currency, do hereby proclaim, order,
direct and declare that from Mon
day, the sixth day of March, to
INSURANCE CHECKS
MAILED AS USUAL
Policyholder! at End of Grace
Period Heed Hot Fear Loiing
Policy if Fundi Are Tied Up.
Br the Associated Prtti
NEW YORK. March € —Bank holi
days In the various States are not af
fecting the payment* of the life insur
ance companies to policyholders and
beneficiaries, it was said yesterday by
the president of one of the leading life
com pan lea.
Checks are going forward as usual. It
was said, but the companies cannot
guarantee their Immediate conversion
into cash in regions where holidays
have caused a temporary suspension of
banking operations.
Policyholders who have reached the
end of their period of grace before pay
ment of premiums need not fear the
loss of their policies, it was asserted
by another official, regardless of what
may happen In the banking institution,
unless It Is determined that they have
or had not sufficient funds to their
credit either in closed banks or un
cashed pay checks to meet the pay
ments at the time of the occurrence of
any personal emergencies.
HOLIDAY IN VIRGINIA
Pollard Signs Pour-Day Legal Sus
pension by Banks.
ALEXANDRIA. Va., March 6 OP).—
Gov. Pollard today signed a proclama
tion declaring a four-day legal holiday
for Virginia.
that not only should these new deposits
be segregated, but that there should be a
Government guarantee thrown about,
thereby bring money out of hoarding.
The question largely depends, accord
ing to one of the Democratic Senators
Interested In banking legislation, on
how great these new deposits might
be. If there is to be no great volume
of them, then little would be accom
plished. he said.
Governors of States are at liberty,
of course to ask the Secretary of the
Treasury for permission for the banks
in their States to open, and the Gov
ernor of New Mexico, Sellgman. was ex
pected to make such a request. Indi
vidual banks could make similar re
quest. It was said.
Yesterday. President Roosevelt's first
full day as Chief Executive, was a
crowded one. Before midnight two
proclamations of vast Importance were
issued by the President; the first, which
came in the afternoon after the Presi
dent had conferred with the congres
sional leaders. Democratic and Repub
lican at the White House, called Con
gress into special session on Thursday.
The second, which was made public
shortly before midnight, declared the
Nation-wide bank holiday. During the
day. President Roosevelt met not only
with the congressional leaders but also
with the members of his cablflfct.
The President in his inaugural ad
dress had pledged himself to exert war
powers, if necessary to meet the situa
tion. He had already familiarised him
self with the provisions of the trading
with the enemy act of 1917, and it was
under its powers that he placed a ban
on the flight of gold, and called a halt
on banking generally.
In his proclamation the President said
there had been heavy and widespread
withdrawals of gold and currency from
the banks for the purpose of1 hoarding,
and that there had been also great ac
tivity abroad in foreign exchange, re
sulting in a severe drain od the Nation's
gold stocks.
Secretary Wood In had the assistance
last night of Ogden L. Mills, who until
Saturday was Secretary of the Treas
ury in the Hoover administration, and
of all his aides in the department.
Thursday, the ninth day of March,
1933, both dates inclusive, there
shall be maintained end observed
by all banking Institutions and all
branches thereof located In the
United 8tates of America. Includ
ing the territories and Insular pos
sessions. a bank holiday, and that
during said period all banking trans
actions shall be suspended. During
such holiday, excepting as herein
after provided, no such banking in
stitution or branch shall pay out,
export, earmark, or permit the
withdrawal or transfer In any man
ner or by any device whatsoever, of
any gold or silver coin or bullion
or currency or take any other action
which might facilitate the hoard
ing thereof; nor shall any such
banking institution or branch pay
out deposits, make loans or dis
counts. deal In foreign exchange,
transfer credits from the United
State* to anv place abroad, or trans
act any other banking business
whatsoever.
During such holiday, the Secre
tary of the Treasury, with the ap
proval of the President under such
regulations as he may prescribe, Is
authorized and empowered <A> to
permit any or all of such banking
institutions to perform any or all
of the usual banking functions. <B)
to direct, require or permit the is
suance of clearing house certificates
or other evidences of claims against
assets of banking institutions. and
(Ct to authorize and direct the
creation in such banking institutions
of special trust accounts for the re
ceipts of new deposits which shall
be subject to withdrawal on de
mand without any restriction or
limitation and shall be kept sep
arately in cash or on deposit In
Federal Reserve banks or Invested
In obligations of the United State*.
As used in this order the term
"banking institutions" shall include
all Federal Reserve banks, national
banking associations, banks, trust
companies, savings banks, building
and loan associations, credit unions,
or other corporations, partnerships,
associations or persons, engaged in
the business of receiving deposits,
making loans, discounting business
paper, or transacting any other
form of banking business.
ALL POLICE ON DUTY
DURING EMERGENCY
Brown Continues in Effect
Cancellation of Leaves
and Days Off.
For the protection of banks and
business houses during the present fi
nancial crisis. MaJ. Ernest W Brown,
superintendent of police, today issued
orders for additional duty by all police
men, continuing in effect the order
against days off and leaves of absence,
passed to cover the inaugural period.
Policemen on beats where banks are
located were given special Instructions
to pay particular attention to the fi
nancial Institutions and to call for as
sistance should depositors appear In I
large enough numbers to suggest the
possibility of trouble.
The metropolitan police force will be
kept mustered to its greatest possible
strength. It was announced. In addi
tion to giving up all leaves, the pohce
probably will be called upon to perform
extra duty, particularly at night, to
afford the greatest possible protection
to business houses.
Brown's order for extra duty
will remain in effect indefinitely, it was
stated, and will not be rescinded until
conditions are again normal.
DISHONEST DOLLARS
LAID TO U.S. BANKERS
Father Coughlin Charges That
Constitution's Provisions
Have Been "Rewritten."
Br th« Associated Pres«.
The charge that modem bankers hare
"rewritten" the Federal Constitution's
provision regarding the coinage of
money, and that as a result "we are
dealing with dishonest dollars." was
made by Rev. Charles E. C:ugh!in, pas
tor of the Shrine of the Little Flower.
Royal Oak. Mich., yesterday during a
radio address.
Father Coughlin accused bankers of
having rewritten the constitutional pro
vision which reads "to coin money, to
regulate .the value thereof and to fix
the standard of weight and measure" to
now read "to coin money and 'fix' the
value thereof "
Aa a result of "fixed" gold. Father
Coughlin raid, "the measure of our dol
lar. which was supposed to contain 100
pennies, has fluctuated until today It
contains 170 pennies."
BRITAIN WATCHES
I). S. CONFIDENTLY
London Banks Ready to Aid
Americans Affected
by Holiday.
Br th» Associated Pr««
LONDON. March 6 —Great Britain'a
policy today was "business as usual,"
while the government here watched
with aympatheltc Interest the Arm steps
with sympathetic interest the Arm steps
t rati on to deal with America's domestlo
banking problem.
The exchange market in London will
continue to deal with all currencies with
the exception of dollars. Transactions
In dollars were rendered impossible for
the time being because delivery of dol
lars cannot be obtained during the
American banking holiday.
London banks have arranged to sup
ply American travelers who have letters
of credit in dollars with sterling for
their immediate use."
The British cabinet met at No. 10
Downing street at 10:30 a.m. It was
stated emphatically this session dealt
with the disarmament crisis at Geneva
and not with the American financial
situation, which is considered purely a
domestic rather than International
problem.
As a consequence of the United
States embargo on gold In the absence
of the dollar in the exchange rate, bul
lion brokers today fixed the price of
gold on the basis of the French franc
at 190 shillings 7 pence per fine once,
against 120 shillings 8 pence on Friday.
It was rumored government and ex
change authorities were endeavoring to
control the Paris exchange rate around
88 francs to the pound.
DOLLAR STILL UNQIOTED.
Holders of American Currency Create
Big Demand on Franc.
PARIS, March 6 <£>).—The dollar *u
still unquoted today, but trading In
other foreign exchanges continued, with
considerable offeis of Dutch guilders,
Qerman marks and Swiss franca.
Bankers said this apparently was bring
done by interests needing French franca
and unable to convert dollar credits.
Paris American banks were advancing
customers three-fourths of exchange on
dollar checks. Tourists agencies were
cashing travelers- checks at the nom
inal rate of 24 francs per dollar.
The American Aid Society, anticipat
ing financial stringency of members of
the colony unable to receive money
from America, will meet tomorrow to
discuss relief possibilities. The society
transported two Americans to London,
where funds were awaiting them.
Reports from other world cities follow:
Berlin—The Relchsbank fixed the dol
lar rate at 4.18 marts, slightly up.
Bankers expressed the conviction that
the American gold standard is in no
danger.
Rome—Foreign exchange markets
were closed and the stock market was
down. The unofficial dollar rate was
18>2 lire.
Madrid—Financiers expressed com
plete faith In the United Statrj. but
urged the maintenance of s~!1
standard. The dollar was cov. n ' l
pesetas, as compered with 8 and a frac
tion on Saturday.
Amsterdam - Stock market prices
were up, little affected by the Ameri
can situation. Holland, still on the gold
standard Itself, was certain that the
United States would not abandon gold.
Basel—The Bank for International
Settlements was lltrt? affected by con
ditions in the Statfes. for most of its
business Is done in sterling.
Vienna—The government Instructed
all banks to cash no checks or drafts
on American institutions for the time
being.
Lisbon—Banks discontinued dollar
transactions.
Johannesburg — Gold shares were
down under heavy selling.
Cairo—American tourists were incon
venienced. Their ciiecks were worth 7
piasters less to the dollar than on Fri
day.
TOfcio— Foreign exchange transaction!
were suspended and the markets were
closed except for quotations on gov
ernment bonds. TTje silk exchanges
here, at Yokohama, and at Kobe also
were closed, but the rice exchange re
mained open.
Shanghai—The dollar was down 33
taels as compared with 29on Satur
day.
Havana—President Machado issued a
decree closing all Cuban banks and
exchanges
San Juan, Puerto Rico—Gov. Bever
ley declared a three-day bank holiday
and announced that the Insular govern
ment is considering the issuance ol
scrip.
Montreal—Canadian banks accepted
the dollar at par but American visitors
experienced difficulty obtaining funds
elsewhere.
Toronto—The stock exchange and
the Standard Mining Exchange re
mained open, but the authorities an
nounced that if any distress selling
from United States sources appeared,
the exchanges would be closed.
Betheida C. of C. to Meet.
BETHESDA. Md.. March 6 iSpecial).
—Bethesda Chamber of Commerce will
hold its monthly meeting in the
County Building here tonight at S
o'clock.
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