‘Speculative Mania’ Harms U.S. Banks
During his 1933 inaugural address, President Franklin D. Roosevelt correctly identified speculation using borrowed money as the major reason for the plight of the banking system at that time. More than 50 years later, speculation is again the reason for the plight of our financial institutions. A case in point is the number of Orange County banks that have gone under because of losses in real estate loans (Picking Up Pieces of Failed Banks Can Turn Out to Be Risky Venture,” June 2).
Following his inauguration, FDR closed the banks and then should have declared 1983 to be a year of jubilee. Legislation should have been enacted requiring that loans made by financial institutions be paid in full before the jubilee. That would have curbed the speculative mania that has swept this country. If several major financial institutions go under this year, President Reagan should declare 2035 as the year of jubilee. Legislation restricting imprudent lending practices can then be implemented.
ROBERT A. DAHLQUIST
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