Salt Lake Telegram | 1933-09-01 | Page 3 | U. S. Will Expand Credit to Push Recovery

U. U isa S. S WILL WILl- EXPAND EXP ANO CREDIT TO PUSH RECOVERY X GOVERNMENT TO PROVIDE FUNDS IN LARGE SUMS Loans to Industries Forced by Adequate Money at Lower Rate By L. L GRIDLEY United Press Financial Correspondent W WASHINGTON ASHINGTON Sept 1 The I-The The government gov gov- government prepared today to pour mil mil- lions oos of dollars into the nations nation's credit stream ream to spur its recovery program A definite credit e easing sing policy was understood to to have been evolved by fiscal authorities after prolonged discussions dis dis- cuss Ions among President Roosevelt Jesse H. H Jones chairman of the Reconstruction Re- Re Reconstruction construction Finance corporation Euene Eugene Eu Eu- gene ene Black chairman of the federal reserve board and Dean G G. G Acheson undersecretary of treasury Under present plans the g government will ill provide the country's banks with money and credit in su such h a measure that hat they will be willing to push it out Into nto business with little fear of impairing im im- paIring their liquidity The government owned Reconstruction tion on Finance corporation it was understood understood un un- will agree to reduce from 4 1 2 1 2 to 4 per cent the interest rate raten on n now loaned to banks New ew loans would be encouraged by bythe bythe bythe the lower rate INCREASE RATE The federal feder l' l reserve banks at th the same ame time will increase their rediscounts rediscounts redis redis- counts of member bank paper and paper and col col- lateral not eligible for this prOC process 5 would be taken over by the R. R F F. F C. C to o make direct loans to the banks it was understood Government officials said last night that lat barks banks would have to furnish voluntary voluntary vol assistance in extending additional additional addi- addi onal credit to business It was considered considered con- con dered significant however that the government itself is a stockholder in nearly early banks and it was believed this ils connection might result in government government gov gov- action to induce banks to in in- crease business loans Federal reserve banks this week poured additional credit into busin business s and banking channels partly artly through open market purchases of f in United d' d States government gov- gov n t bonds FORCE ORCE LOOSENING These steps all aU are designed to force banks anks to lose their timidity pending the ic effectiveness of the governments government's permanent bank policy including federal federal fed fed- eral ral insurance of bank deposits January January Janu Janu- ary y 1 When the bank deposit insurance revision provision becomes effective treasury officials expect little difficulty in inducing In banks bank to loan to business Treasury officials today virtually completed the machinery for the bank deposit insurance corporation now being beng be be- ing ng set up to administer to-administer the program Under the law Comptroller of Currency Cur Cur- ency rency OConnor O'Connor will serve as as' as ass asa a director director tor or along with two oth others rs appointed appointee by y President Roosevelt The president is expected to announce an nn- ounce his selection Tuesday and speculation spec spec- speculation lation on appointees includes the name ame of Walter J. J Cummings special assistant to Secretary ot of of Treasury Woodin Cummings has handled the treasury's bank reopening plan and has his finger on the entire banking hanking situation