Mr. Roosevelt Assumes Office President Roosevelt assumed office on Saturday with the customary ceremonial, and delivered an inaugural speech of little more than ten minutes' duration but remarkable for its candour and courage. That same morning the American crisis had reached its climax with the closing of the banks in Illinois and New York. The cere- mony at the Capitol was preceded and followed by numerous conferences in Washington and New York. A special session of Congress has been summoned for Thursday. THE INAUGURAL ADDRESS "DARK REALITIES " FRO.M OUR OWN CORRESPONDENT WASHINGTON, MARCH 5 Franklin Delano Roosevelt, the new President of the United States, took the oath of office shortly after 1 o'clock yesterday afternoon. This afternoon he issued a proclamation calling Congress into special session on Thursday. His inaugural address yesterday was forceful and courageous. After it he re- viewved the Inaugural Parade, and then turned to confront a situation of greater gravity than any the nation has known since the Civil War. The President spoke for little more than 10 minutes in the clear melodious baritone which is not least of his public advantages, and he was heard by the crowd of 100,000 with attention so deep that applause was infrequent and brief. The nation would endure, revive, and prosper, he said, and the only thing it had to fear was "fear itself-name- less, unreasoning, unjustified terror which paralyses needed efforts to convert retreat into advance." Here is the picture of America to-day as he painted it: - Values have shrunken to fantastic levels; our factories are without orders; taxes have riscn; our ability to pay has fallen; Government of all kinds is faced by serious curtailment of income; means of exchange arc frozen in the currents of trade; withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with Ihtle return. Only a foolish optimist can deny the dark realities of the moment. "FIRST THINGS FIRST" To be forced to sit and listen to this address must have been for Mr. Hoover the unkindest of all the cuts of bitter fortune. Mr. Roosevelt struck about him unsparingly. He spoke of the failure of the " rulers of the exchange of mankind's goods " through their " stubbornness and incompetence," of the " practices of unscrupulous money changers" that are " rejected by the hearts and the minds of men." These men, faced by the failure of credit, have proposed only lending more money, " and they are pleading tearfully for restored confi- dence." Now that the money-changers had "fled irom their l.igh seats in the temple of our civilization," the temple nmight be restored " to the ancient truths." There could be no doubt of his intent. It was to shake the country, but more imme- diately the Congress, into awareness of the need for what he describe(: as "action, and action now." There must be an cnd, the President said, to the conduct in banking and busi- ness that has too often given to a " sacred trust the likeness of callous and selfish wrongdoing." The greatest primary task was to put the people to work, a task that should be treated ' as we would an emer- gency of war." To correct the over- balance of population in industrial centres there must be an " endeavour on a national scale by redistribution to encourage the settlement on the land of those best fitted for the land," vith definite efforts to raise the values of agricultural products, and prevention of the tragedy of grow- ing loss through foreclosures. There must be national planning for all forms of transportation, communication, and other public utilities. Two safeguards were required against a " return of the evils of the old order " -strict supervision of all banking and credit investments and an end to specula- tion with other people's money. There must be provision for an adequate but sound currency. He was, he said, for " putting first things first," for not allowing the erm-ergency at home to wait on restoration of " world trade by international economic readjust- ment." There will thus be no entry in full drcss into the field of international negotiation until some order has been brought out of the incoherence of American affairs, and Mr. . Roosevelt announced himself ready to assume responsibility in its fullest form. If the normal balance of executive and legislative authority cannot be re-estab- lished to meet to-day's "unprecedented task," if Congress should refuse to accept his recommendation of, or itself to devise, "m measures that the stricken nation in the midst of a stricken world may require, then I shall not evade the clear course of duty that will then confront me. I shall ask the Congrcss for the one remaining instrument to meet the crisis-broad executive power to wage war against the cmergency as great as the power that .ould be given to me if we were in fact invaded by a foreign foe." WASHINGTON CONFERENCES Before 3 o'clock the Senate had con- firmed the appointment of members of the Cabinet, and these gentlemen were sum- moned to the White House, where, after Mr. Justice Cardozo, of the Supreme Court, had sworn them in, they held their first meeting with President Roosevelt. Later came an announcement that the new Secretary of the Treasury, Mr. Woodin, had asked officials of the Federal Reserve System and a number of leading business men to meet him this morning, and that simultaneously the President would confer at the White House with a group of Senators and Representatives. The whole financial mechanism of the United States has for the time being ceased to function. The degree to which it will resume movement on Tuesday morning will be determined by the execu- tive action to be taken immediately. The manner of its future operation will in large measure be settled by the pro- gramme of legislation now being drafted for submission to the special Session of the new Congress. In advance of the declared decision it is only possible to report from reliable sources what the general character of the discussion was yesterday and is to-day. Primarily it involves the question whether it is desirable or possible for the United States to avoid at least a technical departure from the gold standard. By some Mr. Roosevelt is advised to use the powers vested in him by what remains of the Trading with the Enemy Act and to decree that the export of gold be per- mitted only upon application to and witl the conseht of the Treasury. An alterna- tive method, which would involve the imposition of a prohibitive fee on gold shipments from the United States, was suggested, but apparently found less favour than the more direct action. In certain quarters it is confidently predicted that Mr. Roosevelt will adopt the former course. CONTROL OF SPECULATION Next in order is the equally important question of domestic suspension of specie payments, which its proponents believe would relieve the intolerable situation of the banks and would permit some fuller deliberation upon the legislative pro- gramme. This programme seems likely to include, among other things, a tax on gold hoardings, a measure setting up rigid con- trol of exchange speculation, and-though this last is very much in the realm of dis- pute-a limited guarantee of new deposits in national banks. It is possible that the announcement of the executive action to be taken will be made later to-day. Certainly Mr. Roose- velt will move and move quickly. His address yesterday was a promise in that sense and the needs of the moment are peculiarly urgent. ** The text of President Roosevelt's speech and messages about the effect of the bank crisis abroad will be found on page 11. THE CITY AND THE CRISIS FOREIGN EXCHANGE SUSPENSION From Our Citv Editor The declaration of a two days' bank holiday in America's chief financial centre -New York-though it was not un- expected by those in the closest touch with the banking crisis in the United States, came as a surprise to the Money Market and the Stock Exchange on Saturday. Indeed, most business men did not learn of the declaration until after they had reached the City, for the decision had not bcen reached in America until the equivalent of 7 o'clock Greenwich time. Its most important effect in the City was to cause a suspension, for the time being, of the market in foreign ex- change. This decision was reached at a hurriedly summoned meeting of the London Bankers' Committee, and a further meeting will take place at 9.30 this morning to consider the position. The committee decided on Saturday that no sterling payments should be made against dollar contracts falling due on Saturday or Monday, but that all ' straight " contracts in currencies except dollars should be settled, that the payment of dollar bills should be made on their merits, and that the issue of drafts and transfers should be effected as normally as possible, the rates of exchange to be left in abeyance. Owing to the closing of the exchange market, the gold bullion market had also to be closed. With the exception of the foreign exchange market the general holiday in New York had little effect on the course of business in Lombard Street. The Bank of England bought ?2,016,243 of gold, bringing its total purchases since the beginning of the year up to ?34,821,132,which havebeen bought from the Exchange Equalization Fund, the gold purchase representing the conversion of dollars and other gold currencies which had been bought by the Fund. The efforts lately to prevent a great rise in the value of sterling as a result of a flight from the dollar and, to a lesser degree, from the franc, had created arti- ficial conditions. A triangular position existed, the three angles being sterling, francs, and dollars. Paris bought dollars and converted them into francs, which it sold to London. The bank holiday in New York suddenly presented an obstacle to the completion of large transactions on this basis. The London buyers of francs could not obtain delivery of the francs because the Paris sellers were no longer able to obtain dollars from New York which they had arranged to buy agaihst the sale of francs. These were the circumstances that caused the London banks to close the foreign exchange market. Some attempt to deal was made at the start, but as a result of the decision business was completely suspended by 10.45 a.m. It is hoped to resume dealings to-day in currencies other than dollars. Incidentally it may be mentioned that the position of the American banks in London is exceptionally strong. FALL IN GOLD SHAPES On the Stock Exchange the influence of the American crisis was mainly confined to the international group of stocks dealt in in New York and London and to South African gold-mining shares. The international group closed with moderate declines. A fairly general fall took place in Kaffirs, many holders deciding to sell for fear that the banking crisis might lead to the United States temporarily abandon- ing the gold standard. As in previous crises in America, the New York banks will issue Clearing House Certificates which will be guaran- teed by all the banks. These certificates will transfer balances as between banks, but will prevent hoarding. President Roosevelt's reference to sound money and assurance regarding national finance are interpreted by bankers here to mean that he will refuse to listen to the inflationists and will balance the Budget by reduction of expenditure, since foreign confidence in the dollar will not be restored unless it is made plain that no deviation from the principles of sound finance will be attempted. RAPID SPREAD OF BANK CRISIS ALL STATES AFFECTED FROM OUR OWVN CORRESPONDENT NEW YORK, MARCH 5 The sudden declaration early yesterday of State banking holidays in New York and Illinois marked the death of the last hope that the panic of bank depositors throughout the nation could be stayed by piecemeal emergency devices before it wrecked the financial structure of the country. There was only one thing to be done-to bring about a cessation for a time of virtually all banking operations, so that Congress and the new Administra- tion might devise and put into operation measures to preserve the banking re- serves of the nation alike from domestic hoarding and foreign withdrawals. After disclosure late on Thursday of the huge amounts of withdrawals from New York and Chicago banks, of the increases in circulation and gold hoard- ing, and of the loss of gold through export and earmarking on foreign account, meetings of bankers were hastily called here. With further heavy ear- markings of gold on Friday and panicky withdrawals of savings and other deposits spreading all through the city, there were more meetings then, which culminated in an all-night meeting at the home of the Governor of the State in Park Avenue, attended by the Governor of the New York Federal Reserve Bank, the State Superintendent of Banks, two of the Morgan partners, a former Secretary of the Treasury, and members of the Clear- ing House Committee, and the president of the Clearing House Association. Meanwhile in Mr. Roosevelfs rooms in the Mayflower Hotel in Washington there was a conference between the President-elect and members of his Cabinet and others. Simultaneously President Hoover was conferring at the White House with the Secretary of the Treasury and Mr. Henry Robinson, a Pacific Coast banker, and there were con- ferences going on between bankers and officials of the Federal Reserve System in the Treasury. NIGHT CONFERENCE All these conferences kept in touch with each other by telephone, and in Washington there were many hurried trips between the White House, the Treasury, and Mr. Roosevelt's head- quarters. The Washington meetings broke up at 3 a.m., but it was an hour and a half later before the meeting in New York ended and Mr. Lehman reluctantly issued a proclamation for a bank holiday on Saturday and Monday. The Governor of Illinois issued a proclamation simultaneously, and then at 9 a.m. the Governor of New Jersey ordered the banks to be closed there. In the next few hours 12 other Governors followed his example, and before the day was out every State in the country and the District of Columbia was wholly or partly under banking restrictions, and the Assay Office in New York had announced that, while it would sell gold bars in amounts of S5,000 or more, it would do so only for gold certificates; it would not accept Federal Reserve notes. The holiday was not mandatory in New York, and until 11 a.m. the Corn Exchange Bank and some others con; tinued to cash pay-roll cheques and permit the drawing of money by cheque. Then the Clearing House Association directed its members to close. Several banks not members of the association allowed limited withdrawals, and at least one, a bank in Forty-second Street, went on throughout the business day doing busi- ness in the ordinary way. CHEQUES REFUSED Thus far the holidays locally have not yet caused great embarrassment to the public, possibly because of the enormous withdrawals of cash made in the past 10 days. In Washington, however, where tens of thousands of persons gathered for the inauguration ceremonies, many hun- dreds are stranded far from their homes and in a desperate situation because of the refusal of hotel-keepers to accept cheques except those drawn on Washing- ton banks. To-day there were many meetings in Washington of members of the Federal Reserve Board, bankers from all the important money centres, two former Secretaries of the Treasury, Mr. William McAdoo and Mr. David Houston, and leaders of the new Congress, and a Cabinet meeting. All were concerned with deciding what immediate steps must be taken to save the gold and other reserves of banks for the support of credit and to provide emergency currency to make business transactions possible. The results of these conferences of bankers and members of the Reserve Board and officers of the regional Reserve Continued on page 14 column 5 MIR. ROOSEVELT ASSUMES OFFICE- Continued from page 12 column 3 Banks, were to be submitted in the form of recommendations to the President and members of his Cabinet late this after- noon. EMERGENCY CURRENCY -Meanwhile in New York the Clearing House Association is already going ahead with its plans for issuing certificates to be used as emergency currency when the banks reopen on Tuesday. In addition arrangements are being made, with the approval of the Governor of the State, Mr. Lehman, himself a banker, for the withdrawal of cash from the banks here sufficient to meet the wages due yester- day or to-morrow. Leading milk dis- tributing companies have announced that they will continue to make deliveries, and tradesmen generally are intimating their willingness to grant credit where payment in cash is impossible. Similar arrange- ments to those being made in New York are being planned in many other cities. The currency to be issued here will be in a variety of denominations, although in none smaller than one dollar. It will be accepted at par by any of the banks in the Clearing House group. In time, if the emergency continues, it is hoped to work out a system of inter-city exchanges. As early as the middle of last week the crisis had already reached such propor- tions that, it is reported, Mr. Roosevelt asked President Hoover to declare a national bank moratorium. According to one account, Mr. Hoover was unwilling to accept responsibility for doing this, but agreed to do it if the request were put in writing.__ MR. ROOSEVELT ASSUMES OFFICE PROMISE OF SWIFT ACTION STIRRING APPEAL FOR EXECUTIVE POWER CABINET AND BANKERS IN CONFERENCE