TOPSY - TURVEY

Rotorua Morning Post, Volume 2, Issue 514, 24 April 1933, Page 3

TOPSY - TURVEY

MILLIONAIRES BROKE . - BOOTLEGGERS TAKE THE , PLACE OF BANKS. HOOVER CAN'T PAY HOTEL PILL. New York, April 10. Social values and conventions are all topsy-turvey in this city to-day as a result of the' greatest financial erisis in America's history. Millionaires are furtively borrowing nickels and dimes from working men, and beggars with pockets full of small change collected in recent weeks have become men of substance. One hears on every side of plutocrats who are being temporarily financed by waiters and elevator boys. Last night in one of this city's finest hotels I saw a man offer the manager a certified cheque for 20,000 dollars (£4000 at par). "I broke," be said. "I'm without a single cent. Lend me 20 dollars on this security." The manager politely declined. In one great Fiftb Avenue mansion a family called its servants together and invited them to pool their resources while the storm lasts. The family and servants between them were able to muster precisely three dollars in ready cash. Yet at the •sarne time the shoeblack who polished my shoes this morning on eredit offered to lend me unlimited change for the duration of the crisis. The city is full of these strange contrasts. Collections Refused. Most churches are refusing to take collections from their congregations, telling them to keep their ready money but others are inviting I.O.U's. The most ironical feature of the crisis ' is that powerful bootleggers have set up as bankers and are cash- , ing cheques and changing bills up to 1000 dollars denomination. The:e beer" barons have enormous sums of ready cash in their safes, because, to escape income taxes, they have never used banlcs. So it happens that this outlawed trade, is the only one of the city's industries not crippled by, the moratorium. Yet it, in turn, is suffering from the paradox that the prices of beer and spirits have fallen to unprecedented low levels. Ancient Coins Emerge. , The shortage of small change has i led to the emergence of old coins, some of them dating back 100 years. Hoarders haVe dived to the bottom of their stockings for gold pieces, while Canadian currency and British pound notes are also taking the place of the vanishing dollar bills. Hotels, resaurants, theatres, cinernas and shops are freely accepting I.O.U's and as a result are filled with happy-go-lucky crowds. Other odd forms of currency temporarily in circulation are -food coupons issued by some firms in part payment of their employees' wages. With the closing of all exchanges, brokers' offices and commercial houses, a Sabbath stillness reigns throughout Wall Street. There is no sign of life in' these vast canyons between down-town skyscrapers. But in contrast with the gloomy silence of the financial citadel the brilliantly lighted theatre district is crowded with pleasure-seekers. Many theatre box offices have refunded money to their patrons to enable them to buy meals. But if the public seems bewildered by'the sudden crisis it also appears highly amused by its embarrassments. The feeling that Providence has, provided a leader in America's bitterest hour of need has been responsible for many touching manifestations. "Here is our new Messiah," cried one venerable Jewish' rabbi to his New York congregation, and prayers are being offered continuously for the President in churches of all faiths. Not since the first days of the war have Americans of all sections, classes and racial origins been knit so closely together. The President has served as a rallying point for the depressed nation. In some of the p'oorer parts of the city food hoarding has begun as a result of the fear that inflation will raise prices, but the general mood of the public is entirely free from panic. Scrip Money. The New York authorities emphasised that sciiip money, which will tem.porarily replaee United States currency, will be backed by the combined assets of 22 New York banks, none of which has ever failed. Scrip will be issued in denominations of from one dollar to 20 dollars, and will be pa.id out by banks instead of currency bills on presentation of cheques. The Government .has appealed to all traders to accept it ini lieu of money. Aceording to Government p'ladges, when this crisis is over scrip will be redeemed in cash 100 cents to the dollar. In order not to startle the public this scrip will resenible the old paper money as closely as possible. The difference between it and regular money lies in the fact that it is not secured by gold or silver but by the guarantee of the banks which issue it. A piece of scrip will he in effect a cheque payable to the bearer. Some Inflation. The first issue of 250,000,000 dollars scrip is ready for circulation in this city_,as soon as the Seeretary of the Treasury gives permission. If there is a hiteh in the use of scrip . then the Treasury will permit the closed banks to release a sufficient amount of ordinary currency to meet the pay-rolls of the big industrial concerns. To-morrow is p'ay day in many industries and the Government is exceedingly anxious that workingclass homes shall not be deprived of money. Mr. Roosevelt is preparing his i banking programme for Congress, , which- meets on Thursday. Some measure of inflation is widely anticipated with a continued suspension of gold withdrawals. The financial mess bequeathed to President Roosevelt is appalling. Mr. Hoover, who is himself short of cash in a New York h'otel, issned a statement to-day urging the country to rally to Roosevelt. ,