The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1932-02-17


gigantic wave of paper money infla-
ton that Wall St has ever embarked
on.
The provisions of the bill allow for
the "liberallzing" of the rediscount
requirements of the Federal Reserve
to the extent of permitting It to ac-
cept commercial paper heretofore
prohibited from being rediscounted.
This will cause a flood of paper
money because the Federal Reserve is
allowed to issue money UP to 40 per
cent of the value of the paper which
it accepts for discount. The law
that gold reserve of 40 per cent
must be held against all paper mon
ey issued will also be revoked al
lowing the Federal Reserve to issue
money with nothing behind 1t but
the obligations of the United States
government which is already faced
by budgetary deficit for 1888 al
most of $2,oOOoO00Oo.
A third provision permits the Fed
eral Reserve to grant loans to indi-
vidual or pooled banks on the
strength of their own notes whereas
first class commercial paper was
formerly required.
The result of this unprecedented
initiation of currency will be to pro-
duce untold hardships for the work.
ing class. The increase in money
will cause a depreciation Of the value
of the dollar. This cut in the pur-
chasing power Of the workers al
ready miserable wages, if he gets any
wages at all, will be still further
deepened by the fact that together
with the depreciation of money the
prices OF all articles of consumption
will jump Immediately. The working
class will be caught in a double scts-
sors OF actual and concealed wage
cuts through depreciation of the DOL
lar and rise in the cost OF living.
This disastrous effect Of infla-
ton on the working class was adj
mitted by Representative La Guar
dia as reported In the New York
Times yesterday, who said:
IF initiation is necessary, call
it initiation. But I say TO you that
in this instance the entire burden
of initiation will be put upon the
wage earners Of the country. 1t
will cost them billions of dollars"
The provision allowing the issue Of
money on the strength of government
obligations is not only an inflationary
measure designed to put the burden
of the crisis on the shoulders Of the
working class, and desperate at
tempt to get out Of the crisis but is
also a move in the financial war be-
tween the United States and France.
Its purpose is to yield the q. S.
government $75o,000,000 of free gold"
to meet the Withdrawals of French
financiers. This antagonism between
the United States and France was
clearly expressed by Representative
Goldsborough of Maryland who was
reported to have said in the House
of Representatives yesterday:
81 told this gentleman that before
the end of the week Congress would
have enacted a bill TO furnish all
the gold we need and France could
take her gold and so to hell with it."
France is not only putting pressure
on the United States in order to force
it to accept its position on the war
debt question but also because Wall
st. has consistently violated the
agreement arrived at between it and
the representatives of French finance,
Lacour- Gayet and FARMER, last Octo-
Der when France agreed to end its
raid on American gold In return for
cessation OF the easy money policy
Of the Federal Reserve Banks. This
agreement was broken by American
bankers under the tremendous blows
of the deepening crisis. In return,
French bankers began their raid once
again on American gold. In the
month Of January alone they took
tS3, 718, 100 of the SLOT ,638,6oo shipped
from the United States to Europe dur
ing that month. OF the $33, $50 900
sent to Europe last week, $309260 20
went to France. This movement Of
gold to European countries outside Of
France is due to the pressure which
France is exerting on them in order
to make them fall in line with her
attack on Wall st. and also because
OF the dollar panic which has de-
veloped in Europe as q result OF the
inflationary policy of the United
States.
The crash of the banking system OF
the United States with a total wreck
age in 1881 of 1890 banks involving
deposits of $l,759, 4S4 900 was the most
complete in the banking history of the
country. The process OF bank failures
continued after the organization OF
the National Credit Corporation.