Kankakee Valley Post, Volume 2, Number 44, DeMotte, Jasper County, 16 March 1933 — News Review of Current Events the World Over [ARTICLE+ILLUSTRATION]

News Review of Current Events the World Over

Congress Passes Legislation Asked by President to End the Banking Crisis--Japanese Complete the Conquest of Jehol.

By EDWARD W. PICKARD

EXPANSION of the currency to the extent of billions of dollars will result from the legislation which President Roosevelt asked of the

extraordinary session of congress and which was enacted within a few hours after the new congress was convened on Thursday, March 9. The new currency is based not on gold, but on the liquid assets of the banks. The plan was devised after long hours of conference by the President,

Secretary of the Treasury William H. Woodin and a number of financial advisers of the administration, and it was the main feature of their solution of the banking crisis that was paralyzing the nation. The other chief points in the legislation which the President called for in his brief but spirited message were: Continued suspension of gold payments and embargo on exports of gold. Clothing of the President with the powers of a financial dictator. Continuation of the national banking holiday, wholly or in part, pending complete reopening of the banks. Legalization of the bank holiday proclamation of March 5 and all measures adopted by the treasury to carry it into effect. Because the new currency is not backed by gold it is called federal reserve bank notes to distinguish it from federal reserve notes which are backed by gold. To what extent if any, inflation of the currency will be produced by this increase in the volume of money was one of the big questions involved in the Roosevelt plan. That inflation will be the consequence was a conclusion widely reached in financial and commercial circles, with the result that a leap upward of commodity and security prices was looked for the moment the exchanges reopen. The act creating the new currency liberalizes the provisions of the GlassSteagall act by allowing banks to issue notes with no gold reserve behind them. The notes thus issued are backed only by United States bonds in the same manner as national bank notes issued by national banks. It further liberalizes section 10a of the federal reserve act as amended by the Glass-Steagall act so as to enable banks to obtain currency on “liquid assets” of a character not previously eligible One of the effects of the legislation will be to produce a unified banking system. Only member banks of the federal reserve system are able to avail themselves of the privileges afforded by this legislation to convert assets previously ineligible into currency. State banks are compelled to join the federal system in order to obtain the funds that will enable them to reopen. Another foreseen effect is the weeding out of weak banks. Institutions unable to furnish liquid assets for currency will be unable to reopen. Others will be able to remain open to the extent ot their liquidity pending at least a recovery of general public confidence in banks. Legislation to stop hoarding also was considered by congress and measures for reaching and punishing the hoarders of currency whose withdrawal of deposits brought on the panic and caused the closing of the banks were discussed by the administration and leaders of the senate and house. As a preliminary move in this direction the federal reserve board at the instance of Mr. Roosevelt, sent telegraphic orders to all federal reserve banks to furnish by March 13, lists of persons who have withdrawn gold since February 1, and had not by that time redeposited their gold withdrawals.

FOR days there was considerable confusion concerning the banking situation mainly because of differences between the President’s proclamation and the orders issued by governors of various states. This was especially true in New York and Illinois. Day by day Secretary Woodin issued orders modifying those in the government’s proclamation closing down all banks, but there was much misunderstanding of his regulations regarding limiting opening of the institutions. Clearing houses were busy holding meetings but failed to live up to their name by clearing up the situation and the banks were uncertain of both their powers and their responsibilities. In many cities and towns banks were open to carry on limited activities that were required to provide food, foodstuffs and medicines and for the meeting of pay rolls. Throughout the country preparations were made for the issuance of scrip, pending the receipt of the necessary authority from Washington. Secretary Woodin, however, ruled against scrip, though he sanctioned the issuance in various localities of clearing house certificates against sound assets of banks for use as an emergency circulating medium, Despite all the confusion and incon-

venience, the American public remained fairly calm and appeared to have confidence in President Roosevelt and his advisers. The general feeling was that the vigorous new Chief Executive would be able to devise competent measures for temporary relief of the situation and to force their adoption by congress. Following the enactment of the legislation for the reopening of the banks the President asked congress for authority to cut an estimated $500,000,000 out of government expenditures by cutting government salaries up to 15 per cent, and by drastic reductions in payments to veterans. It is expected that another $200,000,000 will be saved by the reorganization and combining of many governjment departments, authorization for which was passed in the closing days of the last congress. DEMOCRATIC membership of 313 in the house of representatives gives them an unwieldy majority, and the certain consequence is intra-party

wrangling. At present the control seems to be in the hands of Speaker Henry Rainey and two allies, Floor Leader Byrns and Representative Cullen, leader of the Tammany delegation from New York. Opposed to them is a faction headed by McDuffie of Alabama, who sought vainly to be elected speaked. It was said

several of the Alabaman’s moss active supporters were quietly informed that they would be punished by being shifted from important committees to minor assignments. Senator James Hamilton Lewis of Illinois was elected whip of the Democratic majority in the senate, and Senator Joe Robinson of Arkansas was chosen to be senate leader. Also party authority was made stronger than it has been for many years. The caucus agreed that the vote of any future caucus upon any measure recommended by the President should be binding upon all except those who excused themselves from voting for cause. It was further agreed that a simple majority, instead of the more customary two-thirds majority, should make the action of the caucus binding and that two-thirds of the whole number of Democratic senators should constitute a caucus. The caucus further chose Senator Kendrick of Wyoming as assistant leader, Senator Key Pittman as Democratic candidate for president pro tempore, Edward Halsey as candidate for secretary of the senate, Chesley W. Jurney as candidate for sergeant at arms, and L. L. Biffle as secretary to the majority.

DURING its brief special session that convened on inaugural day the senate confirmed these appointments by the President: Prof. Raymond Moley of Columbia as an assistant secretary of state. William Phillips of Massachusetts, as undersecretary of state, who will he directly in charge and accountable to Secretary Hull. Wilbur J. Carr of New York, reappointed as assistant secretary of state. Henry Morgenthau, Jr., of New York, member of the federal farm board. William F. Stevenson of South Carolina, member of the federal home loan bank board. T. Dwight Webb of Tennessee, member of the home loan board.

F'OI.LOWING out the campaign plan devised by Lieut. Gen. Kuniaki Koiso, the Japanese armies virtually completed the conquest of the province

of Jehol. The Chinese governor fled and all the Chinese troops were forced out after a last defensive struggle at Koupeikow, a pass in the Great Wall. Japanese planes first bombed the Chinese positions there, and then General Kawahara’s brigade took the place. The Japanese thus completed the seizure of

250 miles of the Great Wall, extending from the inner Mongolia to the Yellow sea. The Chinese fled toward Peiping and the confusion and fright in that city led the authorities to establish martial law. The Japanese said they would not push on to Peiping unless forced to by reprisals against their countrymen in that city. Marshal Chang Hsueh-liang was severely criticized for the loss of Jehol and resigned as military overlord of North China, accepting the blame and asking that the national government relieve him of all posts. Maxim Litvinov, foreign commissar of Russia, bluntly informed the League of Nations that the Soviet government would not participate in the doings of the league committee set up to handle the Sino-Japanese quarrel.

EXPRESSING his “cordial appreciation” for the work done in the Philippines as governor general by Col. Theodore Roosevelt, the President accepted that gentleman’s resignation. He reappointed John H. Holliday as vice governor and the Missourian will be acting governor general until a man is chosen for that place. It is almost certain that Homer Cummings will get the plum. Mr. Cummings was made attorney general in the new cabinet after the death of Senator Walsh, but it is taken for granted that this appointment is only temporary. Lewis Douglas was formally appointed director of the budget and was busy with the drastic economy plans he has been formulating for several weeks. This able young man from Arizona believes he can cut a billion dollars from the four-billion-dollar annual federal tax bill, and it is needless to say the public is cheering him on in his efforts. CHICAGO was thrown into mourning by the death of its mayor, Anton J. Cermak, who succumbed to complications resulting from the bullet from Zangara’s pistol when that assassin tried to kill Mr. Roosevelt in Miami. Cermak’s body was taken home from Florida on a special train and lay in state in Chicago’s city hall for a day and night, many thousands passing the bier to say farewell to the man who had made himself leader of the Democracy of Illinois. His funeral in the Stadium was a stupendous ceremony and the procession was the longest ever seen in the city. Zangara was promptly indicted in Miami and arraigned on the charge of first-degree murder, and there was no doubt as to what the outcome of his trial would be.

THOUGH it was generally admitted that the world disarmament conference in Geneva was in a bad way, the British started to make a last ef-

fort to revive it or at least to salvage something from its work. With this in mind, Prime Minister MacDonald and Sir John Simon, foreign secretary, went to the Swiss city to see what could be done. They denied they had any definite plan of action, but they hoped to get Premier Dalndier of France and

Chancellor Hitler of Germany together, on some arrangement that would prevent the utter breakdown of the conference. Sir John Simon said before leaving London that one of the first issues he and Mr. MacDonald would take up in Geneva would be the fact that no other nations had followed Great Britain's lead in imposing an arms embargo against China and Japan, which, as he remarked, “leaves Britain in a situation which cannot be allowed to continue.” The British recognized that the financial situation in the United States might well delay any disarmament action and certainly would cause postponement of the war debts conferences. In the latter matter, however, Sir Ronald Lindsay. British ambassador, did find opportunity to talk with President Roosevelt’s advisers. FIRMLY seated in power by victory in the reichstag elections, Chancellor Adolf Hitler now plans to rule Germany without parliamentary aid for about two years. His National Socialists hold about 44 per cent of the votes in the new reichstag and the Nationalists, his present allies, have 8 per cent. The .election passed off quietly instead of being the bloody affair the foes of the nazis had predicted. The chancellor believes that democracy is a failure in Germany and now has the legal tools to annihilate it. There were many indications that the country is on the way to restoration of the monarchy. One superficial sign of this was the rapid disappearance of the flags of the republic, the flags of the Nazis and of the old empire being substituted. Hitler, however, feels that the restoration must be postponed until conditions are improved, and in this the monarchists agree with him. An evidence of the trend toward conservatism was the order of Hermann Goering, Nazi minister without portfolio, suppressing the nudist movement.

WHEN congress appropriated $8,440,000 for the annual expenses of the bureau of prohibition enforcement it stipulated that none of the money was be spent on wire tapping or the purchase of liquor as evidence. These provisions do not become effective until July 1, but Amos W. W. Woodcock has ordered them into effect now, pointing out that “cases made contrary to them now probably will be tried after these provisions become law.” The result of the order, Mr. Woodcock said, will mean a complete change in enforcement methods and “will cause this bureau to operate almost exclusively against the manufacturers and transporters” of liquor. This, naturally, is good news to the operators of night clubs and speakeasies. THREE days after completing his ninth consecutive term in the house of representatives, Will R. Wood of Indiana died quite unexpectedly in New York. He was about to sail on a two months’ cruise of the Mediterranean for a complete rest after his long and arduous labors in Washington. Mr. Wood was one of the most active and influential of the Republicans in the house and in the last congress was chairman of the appropriations committee. He was seventy-two years old. 1933, Western Newspaper Union.

Sec’y Woodin

Speaker Rainey

Gen. Kuniaki Koiso

Premier MacDonald