Dollar Hunt

Last week the Treasury Department let it be known that approximately one and one-half billion dollars, 25%, of all U. S. currency, was in hiding. It was further estimated that a major part of forty-two millions in "circulation" the week before had disappeared into safety deposit boxes and other less formal hiding places. Since hoarded cash immobilizes the gold behind it national credit was being steadily strangled. Therefore President Hoover took action to lure idle dollars back into circulation. As usual, his method involved public education, mass psychology and an-other commission.

Last autumn when fearful depositors were withdrawing their cash from good banks and bad in enormous quantities, the very mention of hoarding was suppressed lest by its suggestive power it stimulate the process. The White House had no solid assurances of bank safety with which to turn the tide. Now, however, the President has the Reconstruction Finance Corp. to point to as a sturdy backlog for bank protection. With its two billion dollar credit it began to club truant cash back into stable depositories.

R. F. C. inauguration ceremonies had just taken place at its new offices in the old Department of Commerce building. President Charles Gates Dawes. swearing at the bright lights, and two of the three civilian directors were sworn in before a battery of cameramen. Director Jesse Jones tossed his commission gaily in the air. tried to catch it. missed. Director Wilson McCarthy, the last appointee, was still unsworn when the R. F. C. board sat down to its first formal meeting and tried to talk above the din of hammering, plastering, carpet-laying and furniture-moving.

It was decided to use as far as possible the distributing and statistical services of the Federal Reserve system and the skeleton organization of War Finance Corp. It was also decided to adopt a clam-like policy in dealing with the Press. The board's attitude of secrecy, however, did not prevent President William Wallace Atterbury of Pennsylvania R. R. from announcing that his road would apply for a loan of "$5.000,000 a month for an indefinite period" to carry on the electrification of its New York-Washington line. Rail-road Credit Corp. intimated that it might ask for a loan until funds from the emergency rate surcharge began flowing into its pool. It was reported that enough closed banks had already made applications to utilize the full $200.000.000 allowed in the R. F. C.'s charter for their assistance.

In the midst of these activities. President Hoover summoned members of R. F. C. board to the White House, deliberated long with them. After the meeting he announced: "I am convinced that citizens hoarding currency or money do not realize its serious effect on our country. Every dollar hoarded means a destruction of from $5 to $10 of credit. Every dollar returned from hoarding to circulation means putting men to work. . . . Today we are engaged in a war against Depression. ... I therefore request our citizens to enlist with us in the fight we are making." Announced also was the creation of a national organization to carry forward the Hoover anti-hoarding campaign. Behind closed doors in his Cabinet room. President Hoover faced half a hundred public-spirited men and women representing business, industry, finance, labor, religion, etc., etc., etc. He and Mr. Dawes delivered what one press association called "pep" talks, concluding with the request that all who were willing to volunteer for service in the anti-hoarding campaign raise their hands. Up went hands of those who claimed to represent 28.000,000 citizens. John Thomas Taylor, lobbyist for the American Legion, jumped to his feet and shouted: "Mr. President, 1,250.000 Legionnaires are with you!" Publisher William Franklin Knox of the Chicago Daily News, Wartime artilleryman and stanch Republican, was named huntsman-in-chief to ferret out hidden dollars. Then everybody went out on the back lawn to have pictures taken. A second White House announcement: "A dollar in the hands of a hoarder is just a dollar . . . currency is a high-powered dollar. Hoarded currency means that high-powered dollars are idle, and that in turn means idle business, idle men and depreciated prices. . . . The conference expressed its great appreciation of the leadership taken by the Federal Government in the creation of the Reconstruction Finance Corporation and other measures, and agreed that the time had arrived to rally the people themselves not only against hoarding but for the general expansion of employment and to turn the economic tide." President Hoover had urged citizens "to put their dollars to work, either by conservative investment or by deposit in sound institutions." Thereupon inquisitive little Congressman Fiorello La Guardia of New York wrote a letter to R. F. C. requesting a public list of sound banks and trustworthy securities "to re-store confidence in the people who have really suffered enormous losses." The R. F. C. ignored the request. Nor was any public cognizance taken of a letter to President Hoover from Representative Emanuel Celler of Brooklyn, recommending that the individual deposit limit in Postal Savings Banks be upped from $2,500 to $5,000. "Until confidence in banks is restored, people will hide money." Representative Celler argued. "Proclamations will not dispel fear of banks." Jay Morrison of Seattle, president of the American Bankers' Association's savings bank division, was another whom the Hoover plea did not affect. Mourned he: "Since the Depression set in commercial loans have shrunk $9.000,000,000: brokers' loans have dropped from $8.500,000,000 to $500,000,000--practically wiped out; instalment paper has shrunk from $9.000.000,000 to $4,000.000.000. Beside all this liquidation, which has made money available for new credit, the hoarding of $1,500,000,000 is only a drop in the bucket. The banks have no God-given right to deposits. More than 2.300 of them failed in the country last year, tying up $2,000,000,000. If people want to hoard, however foolish the desire, it's their business. After all. the thing is to keep the people from going broke."

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