The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-10-23

President Roosevelt's plan,
as outlined to the nation, left
many details undisclosed.
Pending further develop
ments, government financial
authorities were reluctant to
discuss the subject.
The Presidents sound money
announcement. coupled with plans
for a managed currency led to be-
lief TODAY that the administration
would use all other means possible
to bolster commodity prices before
resorting to direct imitation.
The managed currency idea was
reiteration of the Presidents earlier
plans for a currency with a steady
purchasing power to be adjusted to
offset the rise and fall in commodity
price levels.
Under this plan, advocated in one
form or another by Professors Irving
Fisher. George Warren and James
H. Rogers, the American currency
would be changed in gold content
from time to time to keep its pur-
chasing power constant.
Depend Upon Prices
When prices rose too high the
gold content of the dollar would be
raised and when prices fell the gold
content would be reduced. This
would give the effect of keeping the
money at a constant purchasing
power
Establishment of the Presidents
managed currency was said to be
dependent upon re-establishment of
prices on the basis where debts can
be paid off now with dollars of the
same purchasing power at the time
the debts we're contracted years ago.
This price level. the President in
dicated. might take one, two or three
years.
Steps to control the nations gold
resources by renewed government
purchases through the RFC were
regarded as another step in the
managed currency idea. In addi-
ton to keeping at home the some
S50,000,000 in American gold now
estimated to be sold abroad annual
ly, the American government would
impound this metal for theoretical
backing for its managed currency.
$3.50, 100000 Now Held
Purchase of the newly mined gold
by the government also was ex-
pected to meet criticism of the pol
icy of allowing sale abroad of newly
mined gold where much of it was
falling into foreign spectators
hands.
More than 75O,O0OOO in gold
already is held by the federal gov
eminent as a backing for its cur
rency. When the managed currency
plan is established it is likely that
this gold would be held in the treas
ury, free from domestic and foreign
Withdrawals as theoretical back
ing for the managed currency.
Through changes in gold content
of the dollar from time to time, the
purchasing power could be held
relatively stable. The purchasing
power of the dollar would be eStab-
hshed through a new and elaborate
price index covering all commodities
and now under compilation by the
government.
Steady Dollar Is Goal
When prices of commodities rose
to what the President thought the
correct" levels, the governments
new price index would be fixed at
100. The gold content of the dollar
would be fixed at that time with
the open market value of the metal
A rise in the price index to say
l02 would call for an immediate in
crease in the gold content of the
dollar by a like amount. A decline
in the price would be compensated
for by a corresponding cut in the
gold content.
The direct results of this process
would be to cause the dollar to buy
as many bushels of wheat or any
other commodities at one time as
another, provided those commodities
fiuctuated in line with the some 700
commodity prices to be used in the
governments price index.