Evening star., 1933-12-30
COLD CONF|SCAT|ON|
POWERS DEBATED
Some Treasury Officials Be-
Iieve Morgenthau Has
Authority to Act.
By the Associated Press.

BY the Associated Press.
A welter Of speculation that the Gov
ernment might call into the Treasury
| the vast store of gold now held by the
| Federal Reserve banks drew private
| opinions from several oncials today
that the huge transaction could be
legally accomplished by the scratch OF
| pen.
Some Treasury officials held the opin-
ion that only q simple order by Actlrg
Secretary Morgenthau would be needed
| for the Government to draw the SO ,500,-
| 100000 supply from the Reserve Sys-
TENS vaults.
These legal advisers contended the
same emergency banking provision by
which Morgenthau has ordered in vir-
tually all other monetary gold would
suffice.
Their opinion was by no means unan-
tmous. however. and there was indica-
| tion legal experts Of the Federal Reserve
Board would question this view, consid-
ering the issue decidedly open.
Declines Statement.
The acting Treasury chief himself
mors that the administration was con-
templsting such a step. Questioned by
newspaper men late yesterday. he
turned aside from the matter with the
statement:
Il can't discuss that"
, The question of bringing in the en-
tire gold supply is held by experts to
be Of vital importance in the eventual
revaluation Of the dollar President
Roosevelt has said would be undertaken
Legislation to accomplish the same end
has been drafted by Senator Thomas,
Democrat of Oklahoma
Treasury experts who believe the
executive power sufficient to bring in
the reserve SYSTEMS gold cite the pro-
vision of the emergency banking act
under which Morgenthau has just acted.
1t gives the Secretary the power
whenever ne believes such action is
necessary to protect the currency sys-
tenn Of the United States"-to call in
all monetary gold owned by individuals,
partnerships. associations and corpora
tions."
Argue Banks Are Corporations"
Experts pointed to the last word as
the key. arguing that the IL Federal
Reserve Banks are corporations whose
stock is held by member banks. Con-
Sequently, they contend the systems
gold reserve-more than three-quarterS
of the Nations entire monetary stock
of the metal-could be commanded to
the account of the Treasury of the
United States.
Even those who indorse this legal
agree such fundamental step might
better be the subject of legislation.
Nevertheless. they believe Executive &C
ton might prove more efficient
They point out an order by the
Secretary of the Treasury could be is
sued at night, after all markets close,
and become effective Immediately
This would insure against violent fuc-
tuations which might accompany con-
gresSional debate.
So far as administration spokesmen
are concerned, no official confirmation
has been given rumors of early devalu-
alton OF the dollar recent White
House remark indicated an interna-
tional understanding on gold might
precede such step.
Vigorous Criticism Seen.
On the other side Of the question, it
was regarded as inevitable that a move
to bring in the Reserve Systems gold
would arouse vigorous criticism from
such Republican spokesmen as Sen
ator Reed Of Pennsylvania as well as
from the leading congressional none
tary and banking authority of the
PRESIDENTS own party, Senator Glass
Of Virginia.
for IL
situation said it was likely that Federal
Reserve officials would also oppose such
plan. The governors Of the various
Reserve banks held 'an unexpected
meeting here a week ago and not a word
| OF what was discussed was disclosed
the eoId shnu1S b ene Pam agud IN mat
step preliminary to reyaluatiOn ol the
dollar. which President Roosevelt has
said eventually was to be undertaken.
be minted and that the gold itself
should be Kept in bars as backing fer
paper currency.
Prof. George F. Warren addressing
a meeting of economists Thursday. said
coinage should be discontinued perma-
nently and that steps Thould be taken
to guard the country's gold supply
against runs. In this connection. he
mentioned plan for keeping it in bars
OF such size and value as to make pur-
chase virtually impossible. He warned,
however that mot too much" economic
benefit should be expected Of this pro-
gram"
A price OF S3406 for domestic gold
was announced yesterday the same fig
ure that has prevailed since December
18 No price was announced today be-
cause of the holiday.
VIII BlIR lINDERHIII