Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-11

the present gold supply 1t would re-
quire several billion dollars worth of
new gold in order to furnish 33 1-3
per cent Of metallic gold support to the
billions of dollars in currency initiation
which now exists. Assuming that the
confidence factor requires a gold stock
OF 33 1-3 per cent back of currency is
sued by central banks, it is clear that in
European banks of issue in 1929 there
was an overissue of currency based
on gold of nearly nine billion dollars.
Since that time there has been fur
ther overissue OF currency with dimin-
ishing gold reserve. My information is
that INDUCING in the same assumption
OF 80 1-3 per cent gold reserve, South
American and Central banks have over
issued to the extent of more than $780,
600, 900. 1t is pertinent also to remark
that the overiSsue of currency, If ap-
piled as cash reserve of 20 per cent
back of loans or credits advanced by
the private banks, would result in credit
imitation in the banking systems of
Europe and South America of many
billions of dollars. The African Gen.
trail banks also, on the basis above
assumed, overissued gold currency to
the extent of more than S445 900 900,
forming the basis for credit imitation
through their private banks of more
than 100000.
With the vast mountain of paper cur
rency and credits inadequately secured
1t is to be expected that there would
be dubiety and indeed lack of conf
dence in financial systems and that
there would arise a demand for refor-
nation in the currency and financial
systems of the world.
Gold is being used to shackle the
world HPOnnn1ip1llV and F1n1itirallV The
important nations of the would should
take the lead in effecting such refor-
nation. An international conference
should be called for the purpose of cor
recting glaring defects in the fiscal sys-
TENS of the world Certainly such
a conference undoubtedly would
strengthen the gold metallic base by
adding silver to the same.
Mr.. Wagel in his recent interesting
work called World Economic Depres-
sion" states that ''if silver is used for
currency reserve, and relieves gold OF
part OF its burden, prices will rise and
there will be increased prosperity. The
other alternative is collapse Of prices,
curtailment OF commerce and possibly
reversion to barter"
Should Call Conference.
Even Mr. Keynes states that gold
as the sole standard of purchasing
power is almost a parvenu," and that
of later years an attempt has been made
to have gold "envelop itself in a gar
ment of responsibility as densely re-
spectacle as was ever met with, even
in the realms of sex or religion" He
also adds that except during brief in
tervals. gold has been too scarce to
serve the need of the worlds principal
medium of currency"
Because of the present poverty, I'M
employment and economic depression in
the United States and because of the
important position which this republic
holds materially and morally D..
among the nations, it should call an
international conference for the pur-
pose of considering the silver question
The Senate of the United States unani-
mously adopted resolution asking the
President of the United States to call
such conference. The International
Chamber of Commerce, in May Of this
year. declared that lin view OF
the serious consequences OF the present
situation. and the economic condition
of the world. it is eminently desirable
that a conference should be called dur
ing this year at which all interested
bodies may be heard for the purpose
of seeking a solution of the silver prob
lem"
Eleven States have asked the Presi-
dent to call such a conference. The
American Federation of Labor and
various other organizations throughout
the United States have adopted resolu-
lions favoring an international con-
ference for the purpose of devising a
proper policy in relation to silver.
1 can conceive of no valid reasons why
such conference should not be called
There are MANY reasons which demand
that it be called. Many nations are
looking to the United States, because OF
its important position in the world 10
carry the banner of monetary reform.
In the United States there is a grow
ing feeling that the adlninistrs tion has
too long delayed action in this vital
matter