The Mason City Globe-Gazette from Mason City, Iowa on December 30, 1933 · Page 17
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December 30, 1933

The Mason City Globe-Gazette from Mason City, Iowa · Page 17

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Mason City, Iowa
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Saturday, December 30, 1933
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DECEMBER 30 1033: MASON CITY GLOBE-GAZETTE 3-u'. I: J U. S. POURS MILLIONS INTO GIANT RECOVERY PROGRAM ROOSEVELT GETS UNDER WAY WITH "NEW DEAL"PLAN Administration Takes Job of Guiding Business Through Codes. By FRANK I. WELLER WASHINGTON, Dec.- 27. OB--Ten cheerful, fearful, hopeful, doubtful months of "iRoosevelt recovery" have traced an indelible course on the consciousness of 126,000,000 Americans. Not since the World war has the state of'the union been of such moment to the individual citizen, and few are those who have not evaluated the "new deal" in terms of their .own conception of socialand economic justice. The government's excursion into business and President Roosevelt's use of broad nowers to control the value of currency has been the basis f o r most of the applause a n d lament accompanying the emergency p e- riod of national rehabilitation. W h e n t h e president t o o k his oath of office the nation's financial structure was tottering. Banks were fRAIIK 1 VJELLEt defaulting by'the greatest number and for the greatest amounts in fiscal history. . Four days later the new president 'issued a blanket order closing the country's some 18,000 banks until they could retrench. RFC AIDS BANKS By March 8, bank runs had put $7,538,000,000 of the some $10,000,.000,000 total monetary stocks into circulation. The Reconstruction Finance cor- .poration, from the'sale of its own :bonds, started pouring funds Into banks capable of reopening for business, and by Dec. 2 had advanced 51,357,688,506.29 in loans to banks and trust companies, $667,489,394.99 of which' had been repaid. Despite this priming by the RFC there was estimated to be about ?!,: 800,000,000 of deposits frozen in ·some,' 2,500 banks through out the 'country as late as October. . A De- jposit Liquidation board vvas set up · to deal with, the; situation · and federal..treasury-reports showed .on 'Nov.'30 that only 526 of more than 8,000 ^national banks remained closed, with deposits of about $446,000,000. . -. According to the treasury statement of. Nov. 30 there was $5,740,774,218. in circulation--which indicates a'$1,787,225,882 haa been re- ;turneii to the treasury reserve since Marcb.,8. '.....-.' EMBARGO ON GOLD ;, The ;bank holiday was followed closely by anV·embargo on the exportation of gold and a ban on domestic hoarding. It was estimated that millions,of dollara in the yellow metal were leaving American shores every week for Investment abroat and that other millions were going into hiding at home. Gold stocks decreased from. $4,566,000,000 to 54,242,000,000 in the two months preceding March 8. There is no official estimate of the gold "coin and gold certificates returned to .the treasury, but tola gold stocks at the end of November showed an increase of $80,000,000 since March 9. The first indication of Mr. Roosevelt's determination to control the value of currency came when he withdrew · the gold support of the dollar in. foreign exchange and nulli fied the gold redemption clause in public and private contracts. CURRENCY CONTROL I. ' Tn taking the dollar off the golf 1 |.,standard the president pointed to 1 jvhat was termed the incongruity o I ^romlsing to pay debts in gold when I .otal United States stocks amountec I / O but $4,500,000,000 compared with };$30,000,000,000 o£ government debts ·' .and from ?60,000,000,000 to $70,000, ; 000,000 of private debts calling for 1 redemption in the yellow metal. It was for the.piirpoge of manag ing the dollar's purchasing power [that:Mr. Roosevelt authorized the (RFC to buy gold above the statu 'tory price of 520.67 an-ounce. He previously had permitted exporta tion.of newly-mined gold to give producers the advantage of a world price then hovering around ?30 an ounce. On the first day of purchase the RFC paid $31.36 an ounce and, the oretlcally, the dollar:value of fed "era! reserve gold stocks advancec from $3,592,000,000 to 55,424,000, 000--increasing- by 51,832,000,001 the gold base'for currency issue. The first lull in dollar devaluation came in early December when tin domestic gold price stopped a ?34.01, giving the dollar a goli value of about 61 cents. ; Back of the president's desire t_ I .control currency is his contention ' that national recovery is largely contingent upon restoration of agri culture's purchasing power. Taking 1910-14 prices as 100, t.h_ ,' index of farm values advanced from Government Projects Reach Into Every Walk of Life The butcher, the- baker, the candlestick maker--these and a great many others were affected by the Roosevelt administration's program, inaugurated In 1033. Its varied activities were the center of interest for millions of Americans. 0 in March to 72 in November. The ndex of non-farm prices advanced 'rom 100 to 117.5. Thus, farm values scored a total net rise of 4.5 points :oward parity with non-farm values. CREDIT EXPANSION Credit expansion claimed a front seat at the recovery table. From the ime of its creation in February, .932, to the end of business on Dec. 4, 1933, the RFC had made cash advances of ,$3,453,913,394, of which $986,844,212 had been repaid, almost every dollar of it for credit- creating purposes. Under the emergency banking act, members of the federal reserve issued. ?228,72'8,000 in bank notes secured by a wide range of commercial bank collateral and $208,740,000 of it was put into circulation. The issue was covered by ?2,000,000 of discounted and [purchased bills and ?250,000,000 of government securities."- Fcderal reserve banks, operating n the open'market,' owned ?2,431,300,000 of government securities on December 6, an increase of $530,000,000 since January 1. From the sale of its bonds, the RFC,lent $390,271,767 to railroads, $195,259,525 to'mortgage loan companies; $112,025,136 to building and loan associations; $87,292,000 to insurance companies and made numerous large loans :for the purchase of preferred .securities, including 582,545,700 for stock in the Home Loan bank and the. Home Owners' Loan corporation'. Officials report $57,548,536 lent to 19,972 borrowers. Federal land banks were .authorized to issue and sell bonds on $2,000,000,000 of which .the government was pledged to guarantee interest payments. The RFC advanced · $152,224,899 to regional agricultural credit corporations and $40,500,000 to the Farm Credit Administration. Total FCA farm mortgage loans were reported past the $100,000,000 mark by the first of December. AAA BEGINS WORK In another part of the credit picture the Agricultural Adjustment administration paid cotton farmers $110,000,000 from the cotton processing tax as benefits for taking 10,400,000 acres out of 1933 production and advanced about $200,000,000 in loans on 10 cents a pound on cotton held off the market. Benefit checks expected to tola! $102,000,000 started going to wheat farmers in November on their contracts to cut the 1934 acreage by 8,000,000 acres. Commitment was made to lend corn farmers up to $15,000,000 at 45 cents a bushel on grain sealed in cribs and hog farmers were paid $31,000,000 for 6,200,000 surplus pigs and 220,000 sows. The public works administration with $3,300,000,000 in its coffers reported approximately 10,000 projects approved as of Dec. 1 and 3,179,528 idle men re-employed. It reported $2,500.000,000 transform from federal projects, 85 per ceni of which was to go in wages to workmen. The civil works administration was estimated to have created 2,500,000 jobs as of Dec. 9. The civil- Ian conservation corps reported 300,000 employed in the protection of natural resources at a total firs year cost of $400,000,000.-The federal emergency relief administra tijn said the number of families on relief lists had been reduced from a peak of 4,500,000 in March to 3,000,000 in October and estimated another 2,000.000 would be lifted by the civil works administration. Wage purchasing power was es timated to have been increased 20 per cent by NRA codes. A total o: 150 industries were codified by UK national recovery administration THE GOVERNMENT IN BUSINESS WASHINGTON (;T)^-This is what Uncle Sam's "partnership" with business seeks to guarantee: THROUGH INDUSTRIAL CODES 1. The blanket right of labor to organize and bargain collectively without help or hindrance. 2. Labor conditions conducive to increased employment and wage purchasing power. 3: Co-ordination of production and sales. 4. Control of prices to prevent excesses above or below fair margins of profit. 5. Prevention of cut-throat practices, false advertising- and secret favors to customers. THROUGH MARKETING AGREEMENTS 1. Even and regular distribution of farm produce. 2. Adjustment of marketing facilities to demand. 3. Standardized fair trade practices. ·1. Elimination of sub-standard products. 5. Parity prices to formers without unfair increase in costs to the consumer. prior to Dec. 15 and from 250 300. others'were in the process. to NEW POLICIES TESTED The first contact with "new deal" Jhilbsophy came when Mr. Roose- ,-elt decided to take advantage of ;hc Muscle Shoals development to turn the entire Tennessee valley nto a ; 2 0 year laboratory test of Jie theory that a higher social and economic order could be evolved by national planning. Another early one was his frequent talks "direct to the people" regarding each new step of his re- covery program. His "good neigh bors policy found expression in hi decision against military interveu tion in the Cuban crises. The epitome of that policy was reached in his conferences with Foreign Commissar Litvinoff which suited in the diplomatic recogni tlon of the soviet government in Russia. The president's conferences with representatives of the major com mercial powers in advance of th world economic conference were be lieved to have convinced him thej were not ready for concerted low ering o finternational trade harri ers and decided him on the alterna BANKING METHOD ALTERED AS 1933 DEVELOPS CRISIS 7 ederal Deposit Insurance Brings Striking Change in New Year. IJy .1. I.. COOLEV NEW YORK, W*--Nineteen tliir- y-four brings the inauguration of a lew departure in banking in the United States, just as 1933 changed many old practices. Federal deposit insurance, niah- ng its debut with the new year, represents a striking break with prece dent. Enacted by the emergency con- ress as a means of forestalling panics, and subject to strong criticism from many banking quarters, he plan provides for immediate guaranty of deposits up to 52,500 "rom Jan. 1 until July 1. Insure Jjixrgcr l)eposits. Thereafter larger deposits are to 7e insured by successive steps uri- Jl accounts o£ $50,000 are thus protected by HflSG, II. is estimated, however, Unit 95 per cent of Llic indivkl- lal accounts in the nation's banks are ?2,500 or less. Members of the federal reserve system are required to contribute a percentage of their deposits to the guaranty fund, which will bo administered by a federal corporation Non-member banks can qualify foi participation, although they eventu ally must come into the central sys tern if they are to continue to receive the insurance prolectiou. Innovation Provided. The banking act of 1033, which provided this innovation, was the direct result of the financial disturbances which led to the memorable "banking holiday." Jt seeks not only to prevent a recurrence oE such happenings, but also to eliminate certain practices which had been revealed before the senate invesUgat- ng committee. In addition to federal guaranty of cposits, the net provided: Complete separation of commer- :ive of strong nationalist measure: :o protect American interests. His subsequent message to the world conference opposed interaa [ional stabilization o£ currency while the dollar remained at sucl high ratio to the value of foreign currencies. PRESSURE RESISTED On three notable occasions th president exercised power of resist ance to considerable .sections o public opinion. He carried to th convention floor of the Amcricar Legion his opposition to a cash pay ment of the veterans' bonus, re fused at his conference with govcr nors of the 48 stales to grant th request of five that he fix the cos of production prices for farm pro duce and saw the midwest fnrn strike collapse on his stand againa price fixing and outright currenc inflation. May 1934 bring you Health inn! Happiness During the coming year buy your Suits at Kapa and they'll fit you perfectly. OTTO KAPS, Tailor 8 South Delaware--Mnson City Heartiest Greetings for the New Year From the Officers and Employees of the-Sieg-Mason City Co. C. E. LEFFLER VICE PRES, GENERAL MANAGER G. A. HAWKINS ASSISTANT MANAGER LEO BERRY MACHINE SHOP DALE CLARK SHOPPING DEPARTMENT GERTRUDE LUCAS BOOKKEEPER O. J. ERDAL STOCK RECORDS ADRIAN RINGOLI) SHIPPING CLERK DEAN DENZEL COUNTER GLADYS JOHNSON STENOGRAPHER SALESMEN O.C.HANSON PAUL WILEY WM. LANE F. C. SMITH Wholesale Distributors of Automotive Replacement Parts, Garage Equipment, Dunlop Tires and Kendall Oil Sieg-Mason City Co. 315 South Federal Ave. Phone 74 Mason City cial from investment banking, which meant the divorcement of security affiliates. Cessation of Interest payments on demand deposits and official regulation of interest rates on time accounts. Double M i n i m u m Capital. Doubling the minimum capital of f u t u r e national banks, lifting the figure to $50,000. There were indications, as the year ended, that further banking legislation would bo on the agenda of the new or later congresses. YOU'LL HAVE A HAPPIER NEW YEAR if you smoke tliese good cigars CHARLES DENBV LA FKNDKICII or EMERSON They'll bring you joy and cheer. Get a. pocketful, or a. box, and treat your New Year's Day guesls. LLOYD HESENBERG CO. Distributor--Mason City Wo tuko our hat oft to Ihe New Year, nnd limy It bring you Hie prosperity, cheer, and jrood fortune \vo arc wishing you. We sincerely thiink you for your pntronago during 1933. J. W. Sahr Shoo Shop 10 South lRlii\vam The Jefferson Family Extends Greetings The bus depot of the Jefferson Transportation company, tho Jefferson Cotfeo Shop, tho new Ambci Itoom, and tho Jclferson Uarber Shop are located In this building- at 12-16 First street S. W., anil Fcnlon R. Focklcr, local manager, and all tho employes of these 1 firms wish yon a very Happy New Year. Happy New Year to All! We extend to our customers and our friends the Compliments of the Season, wishing each and eveiy one a kindlier New Year. With deep appreciation we thank you for your help and co-operation during 1 the past year--and we hope we may be of greater service to you during 1934. As we go confidently 'into nineteen hundred thirty- four, we wish all of our friends a Happy New Year. First National MASON CITY, IOWA Affiatcd with the NORTHWEST BANCORPOUATION

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