New York, March 10th
As plans to reopen solvent banks accelerate through Monday, Mr Roosevelt has today asked Congress for authority to make drastic savings on government costs in order to balance the budget and restore public confidence. Pointing out that the cumulative deficit would soon reach $ 5,000,000,000 (about $ 1,000,000,000 at face value), he asked for power to cut payments to former soldiers, as well as government salaries and expenses. He is known to hope to save about $ 614,000,000 in this fashion, of which $ 279,000,000 will come from veterans, $ 135,000,000 from federal salaries, and $ 200,000,000 from restructuring and elimination of government offices.
In a special message to Congress, he says that if given powers, he will “have enough government income to cover expenses within a year.”
The federal pay cut, including previous cuts, will not be more than 15 percent. The cut in allowances for ex-soldiers will reduce disability payments, with the exception of those who are actually disabled while on duty.
The reserve backs are open again today
Late last night, Mr. Roosevelt issued an order to extend the federal holiday until further notice. In the meantime, the finance minister asked solvent banks to apply individually for permission to reopen. State banks need to turn to state agencies, but few of them are expected to be able to reopen until they receive federal aid, which only comes if they join the Federal Reserve system. The gold embargo will of course continue even after the banks are reopened.
The twelve central banks of the Federal Reserve will reopen tomorrow.
All major life insurance companies headquartered in New York State have suspended credit or surrender payments on policies. However, a public statement said their cash equivalents are 50 percent and greater than their liabilities from their actual insurance and pension obligations.
Work for the unemployed
Mr. Roosevelt will be soliciting a $ 500,000,000 loan from Congress tomorrow for an extensive public works program. The plan is to place 500,000 unemployed men in a “peace army” where they will receive food and $ 1 a day while they are engaged in reforestation and similar work projects.
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