Evening star., 1932-02-07
ROOSEVELT FAR In LEAD
AS DEMOCRATIC CHOICE
denomination of Hoover Declared a
Certainty, Even Before Coolidge
Announcement

Representatives of both parties and
from every section and rejecting every
business group. An important one,
typical of all, was proposed by Senator
j. Hamilton Lewis of Illinois Senator
Lewis amendment would authorize
any court of equity Of the United States
| or of any State to suspend
any action seeking judgment or to en-
join execution of foreclosure"
That was a direct attempt at statu-
tory relief of debtors by arrest of fore
closure. In the same spirit were some
80 others.
All these attempts failed. They
failed, it is true, largely because Con-
gress was in a hurry to enact the prln-
cipal measures to which these amend
ments were attached. We may say that
for the present Congress has shown a
disposition not to relieve debtors in this
particular way But it is abundantly
clear that Congress is determined to re-
lieve debtors in some way and is Under
overwhelming pressure to relieve them.
The other way to relieve debtors IS
by raising the price level The price
level can be raised in several ways. The
one that Congress is certain to at
tempt is by circulation (and, therefore,
the quantity of credit.
Congress and Currency.
Debtors can be relieved by raising the
price level-for example. by raising
wheat from so cents a buShel to 81
a bushel. The price level can be raised
by increasing the quantity of currency
in circulation among the people. In
creasing the quantity of circulation is
commonly called initiation In the
present situation it ought not to be
called imitation. Accurately, it is rather
a case Of stopping defation' "Inf1a-
ton is a word leaving a bad name,
because it is properly the term. to de-
scribe increase of currency and credit
at time when there is already too
much. What we have now is an eX-
treme in the other direction an eX-
treme contraction, an eXtreluc def1aClon
And the purpose now is to arrest eX-
treme defiation by increasing the guam
tity of currency and credit.
Increase of currency Cand credit can
be achieved by Congress in one OF two
ways:
(A) Increasing the quantity of cur
rency which Federal Reserve banks can
pass out in exchange for commercial
paper.
tB) Coming silver. in addition to gold
and in a certain ratio to gold.
The attempt to increase currency
through Federal Reserve banks will b.
made first. If that fails. then we sha-
/
age of silver The demand for cOinase
of silver will appear in Congress; if it
fails there, it will appear in the presl-
dental campaign. Coinage of silver as
a political issue can only be forestalled
by legislation to increase the quantity
Of currency through the Federal Re
! serve banks.
To understand this it is necessary to
understand first how currency is Gre
b,y Doc no
Any business man can take certain
types of commercial paper to his
bank. His bank in turn can take =
to a Federal Reserve bank, and toe
Federal Reserve bank will hand OH
currency for it.
The kind of commercial paper tfft
can thus be turned into currenc" is
severely limited. A mortgage will lot
do. Henry Ford might give a mortgage
for S.. 900, secured by all the real estate
he owns. but the Federal Reserve bank,
under the present law, will MOI give
out currency for it.
The attempt in Congress will b. to
enlarge the kinds of commercial paper
which can be exchanged for currency,
which are, in the legal phrase, eligible
for rediscount privilege" When that
attempt is made. it will be resisted by
some conservatives Though decidedly
not all--many conservatives are strongly
in favor of increasing currency I,y this
means).
The leader of the opposition will
probably be Senator Carter GlsSs OF
Virginia. Senator Glass was one OF the
authors of the Federal Reserve Sys-
tenn l6 years ago He regards himself
as the defender of his child. Against
any attempt to "tamper" with the sys-
tenn, Senator Glass is "HoratiuS at the
bridge" or. as one of his irritated OPP
ponents put it, johnny at the rat
hole"
Senator Glass is alertly and violently
, critical of proposals to increase the
| currency ry expanding the kind of
paper for which Federal Reserve banks
, can issue currency. His opponents say
| that the whole method and system of
) carrying on commercial business has
changed since Senator Glass helped
J write the Federal Reserve act in 1915
| and that limitations adopted at that
: time are now absurd.
Fight Will Come.
The fight on this point will come. 1t
will be probably the major fight OF
! this Congress. If it is won, if the kind
of commercial paper eligible to be
: turned into currency is enlarged, that
3, will end the matter Thereafter, pre-
sumably. the quantity of currency in
. circulation will increase. In cOnse-
-, quence of that, presumably, the price
\ level will rise. In consequence of rise
; in price level debtors will find it easier
: to pay All that-or, if it does not hap
pen, the lack of that-will have a pro-
found effect on the presidential cam
paign.
If however, Senator Glass and the
extreme conservatives win; if the guam
tity of commercial paper eXchangeable
into currency is kept limited, in that
event we shall have infallibly demand
for increase of currency in another
way a demand for what is called,
coinage of silver The silver fight is
surely ahead of us unless the Federal
Reserve System is modified
If the free-silver fight comes, it may
= have a powerful effect on the Demo-
cratic nomination. The demand for
free silver in the Democratic platform
will come-indeed, has come-from
Western Democratic Senators, such as
. Wheeler of Montana. If free silver
should be inserted in the Democratic
platform, would Franklin Roosevelt
then take the nomination? Would it
do him any good to take it? One of
the chief reasons for nominating RooSe-
welt is the presumption that he can
carry New York State. But could he
or any one else carry New York on
: free-Silver platform?
= Free silver is a Western issue and
if 1t should get into the platform: woui=:
: seem to call for Western candidate.
; Herein lies the long chance which one
,, suspects, may be inspiring Gov. Alfalfa
Bill Murray of Oklahoma in his pres
ent peregrinations up and down the
land.
: Must Be Popular.
o From the Toledo Blade.
: Mrs. Mccormick says Mr. Hoover is