The President's News Conference

HOARDING OF CURRENCY

THE PRESIDENT. I am glad to report that since February 4 when I took action on hoarding, there has been an entire turn of the tide. Up to a few days previous, hoarding was greatly on the increase. Since then it has not only stopped but it is estimated that about $34 million have returned to circulation from hoarding.

ECONOMIC IMPACT OF HOARDING

I have one or two matters for background, especially with view to the very helpful attitude of the press on our financial measures, there is one phase of it that I think might be useful to you. It is useful to us anyhow. That is the difficulties in visualizing to the man in the street--and this is purely background as I have said--the purposes of these various financial measures which are in reality of very vital importance to every man, woman, and child, whether employed or unemployed, whether farmer or businessman. They have no other purpose than attack on unemployment. The public can understand that if one local merchant finds it difficult to borrow from the banks his normal credit to maintain a stock of goods, he necessarily shortens down on his stocks and this reflects right back to the manufacturer and thus into unemployment. The country is shorter on its stock on the shelves today than ever before in history in proportion to the population and normal demand.

Another instance is where a flour miller is unable to borrow his normal amount of credit to carry his seasonal supply of wheat, which shortens down stocks and throws the carrying burden back on the farmer and tends to depress prices. When a local industry is unable to secure normal credit to finance his raw materials and customers he necessarily has to shorten his operations and create unemployment. The local banker and lending agency are unable to obtain normal credits from other institutions; they necessarily cannot extend mortgages falling due. And then we have foreclosures, and people lose their homes and farms. When a railway goes into receivership from inability to find money with which to pay interest on bonds, then again not only do we have depreciation in prices of these securities, but it affects the assets of every institution. We bring in the question of such things as life insurance, charitable trusts-so these are the things we are trying to reach fundamentally.

Of course, hoarding is just one of the parts of the vicious cycle that starts from a shortage of credit. What we are trying to do is open the channels of credit so as to dissipate fear and apprehension in the minds of the bankers and the public and businessmen, and thereby restore the people to their normal jobs. It is a program that is direct and fundamental in ending unemployment and the stagnation of agriculture.

Perhaps some of you can yourselves help in trying to get this thing over with the intense technology of the Reserve System which requires an expert to work through.

EXECUTIVE BRANCH REORGANIZATION

There is another matter of background in connection with the message which has been released to the press and is going to Congress tomorrow, on reorganization of the Federal departments. Again this is a wholly nonpartisan measure on the lines of proposals that have been made by every President from Taft down, including Wilson, Harding, Coolidge, and myself. It is an economy measure, one that is long overdue. The difficulties of reorganization, as you know, are pointed out in the message. I have myself been advocating this for the last 6 years.

It is not proposed to undertake sudden and revolutionary action through departments but to be in position, after we have been able to weigh all the factors, to make careful examination of every move and give everybody a chance to be heard, then have authority to act and at the same time provide full participation by Congress in any action taken and full opportunity for them to reexamine the validity of every step. It is proposed merely to try to avoid waste that goes on now through dissipation of energies in a lot of places that overlap and are not under adequate control. I think if you will look over the structure of the Government you will find that major expansion has taken place in the independent administrative agencies, that probably anywhere from 15 to 20 could be well consolidated in the departments or working with each other. It is proposed to do this without disturbing any of the great major activities of the Government and independent agencies such as the ICC [Interstate Commerce Commission], Federal Trade, Federal Reserve, or any other major activities. There is no suggestion of alteration in structure of those parts but to gather up a lot of fractions all over the Government and put them somewhere so as to decrease the amount of waste and overlap. That, however, is only to assist you in a discussion of the message. It cannot be used in advance of delivery of the message to Congress, but, since I won't see you again until after said delivery, I thought you might use this when the message comes out.

Q. Will we have access to this ?

THE PRESIDENT. Yes.