Evening star., 1933-12-23
Increase in Commodities as
Result of Silver Plan Is
Needed First.
FEDERAL RESERVE BOARD
HOLDS SECRET MEETING
1nfaticnists Term Roosevelt's Ac.
ton Only Step and Ask Out
right Reconciliation.
By the Associated Press.


President Roosevelt today pursued a
sort of hybrid bimetallic- commodity
dollar idea in search for higher prices.
The Capital eagerly sought evidences
Of any administration moves to carry
out his expressed hope for extension
of the silver sterilization plan to other
media of exchange, perhaps gold, and
wondered whether last nights secret
and hurried meeting Of Federal Reserve
Board governors was necessitated by
developments or forecast others to
come.
The President expects silver coinage,
among other things, to depreciate the
dollar in silver-using countries, Just as
gold purchases have done in nations
which use that metal as a base.
When that depreciation, both at
home and abroad, reaches level which
Mr.. Roosevelt considers satisfactory,
and when commodity prices suit him,
he hopes for sterilization.
He would like to regulate the dollar
then so its purchasing power, in terms
Of commodities, would be more con-
slant. Constatncy, his advisers saw.
would be achieved through continued
control Of the value of gold and silver.
SO the dollar, it is theorized. would be
indirectly based on commodities, with
It's purchasing power directed through
changes in the price of two basic
metals.
66 Nations Signed Pact
The presidential hope for interna-
t1onal concord on such a program is
based upon what he termed the really
significant feature of the silver plan
for the first time the world agreed
upon means Of handling one of the
two great fundamental currency bases.
SiXty-siy nations signed the silver
agreement reached at the London Eco
nomic Conference. but sterilization of
gold-backed currencies frequently has
been rejected by the United States be-
cause Mr. Roosevelt thought prices were
not high enough.
Discussions here of the silver pro-
gram and other things involving the
Nations money and banking problems
continued. The Federal Reserve Board
OF Governors declined to say what they
talked about in their meeting held about
the time Chairman Jones Of the r.
F. c. was estimating that 500 out of
7,700 banks which asked for inclusion
under the deposit insurance law, .ef-
fective January /. would need about
S66, 100000 to make them eligible.
Jones made this estimate In an exec
utive session of the Senate Banking
Committee. The committee told him
to go ahead, use his head, and help
all those banks that were reasonably
safe"
After the session, Jones explained to
newspaper men that more than 90 per
cent Of the State banks are eligible for
insurance and can qualify without
help"
What We are doing is discussing
ways and means of helping the Others"
he added.
The temporary deposit insurance pro-
vision of the bank law goes into effect
in nine days, but this was the first time
the number of qualifying and applying
State banks had been disclosed.
Under the law, Federal Reserve mem
Der banks are admitted automatically,
but non-member banks must apply.
stand examination and be approved by
the Deposit Insurance Corporation.
ACTON termed Only Step.
Jones sought the advice of the SEN
ators on how far the corporation should
go in aiding banks to qualify for the
insurance fund, but they refused to Law
down any hard and fast rule, leaving
the problem to him.
Meanwhile, the political implications
of the silver move absorbed many stu
dents of the Presidents monetary pro-
gram. Although pleased, many of the
inflationistS called the Presidents ac-
ton only step in the right direction
which should be followed by outright
reconciliation of the white metal. They
expressed determination to continue
working toward that goal.
However, the opinion was expressed
that they had been stripped of
much Of their less extreme following
and that the Chief Executives action
had broken the combine which less than
a year ago came within six votes of
placing the Senate's approval upon a
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