The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1932-02-29

American banks as security behind
the issues Of Federal Reserve notes.
Hoover's statement fully confirms
the analysis made by the Daily
Worker on many previous occasions
that the Glasssteagall Bill and the
Reconstruction Finance Corporation
were essentially war measures Of des-
peration directed at propping UP the
tottering financial structure Of Amer
lean finance and at warding off the
financial attacks of French finan-
ciers.
The French inperialists, by with
drawing partially, and threatening
the complete withdrawal, Of $780,
100000 in French chort-term bal
ances held here, and by conducting
large scale Withdrawals Of gold over
a period Of eight or nine weeks, have
been attempting to maneuver the
United States into adopting 8 'rea-
sonable" attitude toward scaling
down the war debts without demand
ing the abolition of indemnity pay
ments by Germany.
Evidence of this unconcealed finan-
cial war is given in the figures of
French gold Withdrawals from the
United States. Up to and including
Feb. 7, $l11,o92, TOO in gold had been
withdrawn from the United States
by France. This boyement is still
continuing. The French imperialists
are also using as a club over the
American bankers the small states OF
Europe, which are completely under
her financial domination.
These countries have combined
with France in "raiding" the Aenlr-
lean treasury to the tune of $751;
334,500 since the first OF the year
This is the second largest outward
gold movement in the history of the
United States, the first having taken
place last September and October.
The Withdrawals Of gold on the
part of France are now proceeding
with renewed intensity because in
addition to the stimulus Of employ
ing its gold and Short-term balances
as weapon for bringing the United
States TO terms on the war question,
France takes the view that it is best
to desert the sinking shop of infla-
ton. The deepening Of the finan-
cial crisis has forced American finsn-
ciers to resort to open initiation OF
currency.
Undr the provisions Of the Glass
SteagaI Act almost twice as much
paper currency will be issued as un-
der the former bank acts. Under
former bank provisions only s1,152,
21T857 in Federal Reserve notes
could be issued against gold re-
serve OF s2,476, 66O,s5o. Under the
Glsss-Steagall Act, $2,s1i, o3S,375 in
notes can be issued against s1.773,-
1890 in gold reserves. The net re-
suit Of the financial lugglery which
Wall st. is engaging in, will be 10
allow for an issue of approximately
twice as much paper money against
almost half as much gold reserves.
This unprecedented initiation OF
paper money has acted as a further
reason for French Withdrawals. To-
gether with its European satellite
states, France is taking its money
out Of the United States before the
depreciation Of American currency
involves them in tremendous losses
in security values.
Placing the features of the Glass
Steagall Act which make it war
move against France and other Euro
pean countries, especially in the face
Of a new world war now being de-
veloped in China, ahead even Of its
features as an inflationary measure,
Hoover stated:
"The bill should accomplish two
major purposes:
First. In a sense THIS BILL
is A NATIONAL DEFENSE MEA-
SURE. BY freeing the vast amounts
of gold in our Federal Reserve
System lin excess Of the gold re-
serves required by law II so in
creases the already large available
resources Of the Federal Reserve
Banks to enable them beyond uues-
tion to meet any conceivable de-
mands that might be made on them
at home or from abroad"
Further strengthening the open
admission that the Glsss-Steagall
Act was war measure, directed
against European finance capital,
principally France, Senator Glass, in
commenting on Hoover's statement.
made the following admission:
-. the plan would release about
ss0o,O00,O00 in gold In order TO ir-
sure these banks against embar-
rassment from raids on their gold
supply by foreign countries or
otherwise"
The Glass Steagall Act, as pre-
yiously pointed out, means two
fold attack on the working class
through reduced purchasing power,
higher cost of living, direct and IN
direct wage-cuts, increased taxes on
articles of mass consumption through
the sales tax, and. in addition,
sharnened danger of new imperial-
list war. N
The working class must rally be-
hind the Communist Party and Red
Trade Unions for a determined re-