Evening star., 1932-10-28

Disagreement as to the nature Of the
financial emergency Of several months
ago. on which President Hoover made
statement in his Des Moines speech,
has developed among expert observers
The controversy developed when Sena-
tor Glass of Virginia, recognized finan-
cial leader in legislative circles, denied
that the country had been in danger
of going OF the gold standard.
There has been and is difference
Of opinion" says the Philadelphia Eve
ming Bulletin independent Republican,, ,
"as to the availa bility Of all the gold
supply credited to the United States
which may furnish the basis for the
controversy as to whether the United
States has within the period of this de-
preston been within sight of enforced
abandonment of the gold standard.
But, with recognition of that differ
ence of opinion. it was more or less
open secret in Washington six months
ago that Treasury and administration
officials had worried and striven to
avert a crisis in the financial situation
which they regarded as Immediately
threatening the maintenance of the gold
standard. and that they considered the
successful effort against that particular
peril a most fortunate achievement
Ears that were open in Washington last
Spring heard the statement that Presl-
dent Hoover made in Des Moines and
it was not decided at that time"
In opposition to this position is that
of the Springfield CMass) Republican
tindependent), which believes that "the
President must have exaggerated the
situation" That paper continues: 1T
is incredible that, with the monetary
gold stock of this country at that time
more than four billions of dollars. the
largest amount then held by any ma
ton, the United States could have been
driven from a gold basis in two weeks
When the gold drain ended in June the
gold in this country had not fallen
much below four billions. At no time
in that period. critical as 1t was un-
questionably, was there the least inti-
nation from the Federal Reserve that
the gold standard in this country was
in Imminent peril. Senator
Glass testimony is to the effect that
no such disaster as the President re-
ferred to as possible or imminent was
brought to his attention last February
by administration leaders. when he and
all the Democrats of the Senate and
House co-operated in passing the Glass
Steagall act. The need of that imam
cial legislation for reinforcing the
available gold reserves, by releasing
certain amount of gold from the back
ing of Federal Reserve notes, was gen.
orally conceded. But it was in the ma
ture of far-sighted preparedness Tor a
strain that might eventually come, not
of hurried last-minute arrangements to
ward of an imminent peril.
Recalling that the financier, Otto H.
Kahn, appeared before the Senate
Finance Committee and opposed vigor-
ously any suggestions that the gold
standard should be abandoned" the
Buffalo Evening News independent Re
publican) also states that "the country
actually was facing an agitation. d.
rected particularly by John Maynard
Keynes, British economist, to abandon
the gold standard because Great Britain
had done so and because various other
European elements thought their inter-
ests would be served by such a course
on the part of the United States" The
Rockford Register Republic dndepend-
ent Republican, asserts: THE records
Of the Federal Reserve System show
that last February what Is known as
free gold which means gold in excess
of all legal requirements, was down to
o dangerously low total, below $400, ,000,-
O00 In the previous fall, Immediately
after Great Britain abandoned the gold
standard, we lost $750,000,000 in gold
within q few weeks when foreign ma
tions called for their balances in this
country. Gold again was flowing out
at an alarming rate in January and
February. The administration, through
the Glass -Steagall act, made 1t possible
to substilHts Government bonds for