C. R. O. Into Action

P:At Tottenville, N. Y. a clam digger found 22 silver dollars in a tin box in the mud. He sped them to a bank. P: Near Fort Wayne, Ind. a farmer hid $250 in an old bureau drawer. Rats chewed the bills to bits so small that banks refused to redeem the trash. P: At Los Angeles a 10-year-old boy found a tin can, used it as a target for rifle practice. Out of the can his father extracted eleven $1,000 bills, perforated with bullet holes. A broker accepted the currency in payment for securities.

P: In New York City a corporation turned in to its bank $400,000 in gold it had been storing in a vault since last November.

With such tidbits of news President Hoover's campaign against hoarding moved forward on a nation-wide front last week. Announced the President: "Since I took action on hoarding, there has been an entire turn in the tide. ... It has not only stopped but it is estimated that $34,000,000 has been returned to circulation from hoarding."

In charge of the President's attempt to lure some $1,300,000,000 in currency out of mattresses, old teapots, chimney corners and safety deposit boxes was Col. William Franklin Knox, publisher of the Chicago Daily News. For a fortnight Col. Knox had been busily creating what he named the Citizens' Reconstruction Organization to combat hoarding. Chairmen were appointed in all twelve Federal Reserve Bank districts. Each State and city was organized for a great educational drive commencing this week.

First item in the C. R. O. campaign was advertisements reminiscent of War time. A young New York advertising agent named J. Sterling Getchell prepared a set of six page spreads. Col. Knox was enthusiastic. In four days this publicity was manufactured free and distributed to dailies throughout the land with the request that they run it without charge as their contribution to the C. R. O. drive. Typical theme: a row of giant locomotives with this headline: "Let's go America! Put those idle dollars back to work and start things rolling."

About March 7 an undetermined amount of one-year Treasury certificates in denominations of $50, $100 and $500 will be put on sale throughout the land as a sponge to absorb hoarded currency. They will have an interest rate of less than 3% so as not to compete with savings banks. The Treasury will cash them on 60 days notice. The Government will allow the proceeds of the sale to remain on deposit with banks, thus increasing their cash position. Banks can also buy these Treasury certificates on the credit of their deposits with the Federal Reserve system. This issue of bonds will be separate and distinct from the Treasury's regular periodic financing in the public market.

To heat up the country to put its hoardings into these securities as a patriotic duty, to convince it that they are as "good as gold," C. R.O. planned a high-pressure house-to-house selling campaign early in March.

Disturbing to President Hoover and his aides last week was an undertone of popular criticism to the effect that all his relief measures were designed to help banks, corporations and railroads but provided no assistance for the average citizen. Hoover spokesmen set about to correct this impression by frequent explanations of the economic cycle and the manner in which relief at the top trickles down to the man in the street. As the White House saw it, increased bank deposits moved through a circle of credit that ended in increased business, increased employment, increased wages for all (see cut).

Meanwhile last week the Reconstruction Finance Corp. was forging ahead, shoring up weak banks and railroads with Federal loans. Washington was crowded with executives looking for cash. Hotel rooms were at a premium. Loans were consummated after a few anxious words over the telephone. Complete secrecy veiled all the R. F. C.'s doings, lest publication of borrowings damage the credit standing of individual concerns. Nevertheless when one large anonymous bank repaid a $1,000,000 R. F. C. loan in five days, there was boastful publicity at R. F. C. headquarters. So rushed was President Dawes that Henry Justin Allen of Kansas was appointed his assistant.

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