New York, March 10
As plans rush to allow solvent banks to reopen by Monday, Roosevelt today asked Congress for permission to make drastic savings on the cost of government to balance the budget and restore public confidence. Stressing that the accumulated deficit would soon be $ 5,000,000,000 (roughly $ 1,000,000,000 at par), he called for the power to reduce payments to ex-soldiers as well as government salaries and spending. We know that he hopes to save about $ 614,000,000 in this way, of which $ 279,000,000 comes from veterans, $ 135,000,000 from federal salaries and $ 200,000,000 from the reorganization and elimination of government offices.
In a special message to Congress, he said that if he was given powers “within a year, government revenues will be sufficient to cover expenses.”
The federal wage cut, including previous cuts, will not total more than 15%. Reductions in allowances for ex-soldiers will reduce disability benefits, except for people who are genuinely disabled while in service.
Reserve rears reopen today
Late last night, Mr. Roosevelt issued an order extending the federal holiday until further notice. Meanwhile, the Treasury Secretary urged creditworthy banks to individually apply for permission to reopen. State banks should go to state authorities, but it is safe to assume that few of them can reopen until they receive federal aid, which will only be paid if they join. the Federal Reserve system. The gold embargo will of course continue even after the banks reopen.
The twelve central banks of the Federal Reserve will reopen tomorrow.
All of the major life insurance companies headquartered in New York State have suspended the granting of loans or the payment of the cash value of policies. In a public statement, however, they state that their liquid resources amount to 50 percent and are greater than their liabilities under their actual insurance and annuity obligations.
Work for the unemployed
Mr. Roosevelt will ask Congress tomorrow for a bond issue of $ 500,000,000 for a major public works program. The plan is to place 500,000 unemployed people in a “peacetime army,†where they will receive food and $ 1 a day while they are engaged in similar reforestation and labor projects.