Evening star., 1933-04-21
TERMS OF: Pending.
CURRENCY SCHEME
Operations of RooseveIt's
Controlled Imitation Meas
ure Clarified.
BY the Associated Press.

Members Of Congress discussed today
just how the administration supported
currency expansion bill would work and
here are some Of the things they found:
The measure, offered as an amend
ment to the farm bill, would permit
negotiations between the Secretary OF
the Treasury, the Federal Reserve Board
and the IL Federal Reserve banks under
which the Reserve banks would buy $3,-
0OO, ,00O, 900 worth of Government obn-
cations and hold them for q specified
time. The holders Of the obligations
would receive cash IN return Tor the
securities.
Many banks now hold Government
obligations bringing them interest. In
place of these they would get cash, cur
rency. drawing no interest. To make .
profit, they would have to lend the
money to some one at interest. This
would act to liberalize loans to industry
and others needing funds.
Individuals who got cash, earning
nothing, instead of bonds would, 1t was
believed, prefer to put that cash to
work.
Issuance Of New Notes.
If the Secretary Of the Treasury could
not obtain the necessary agreement with
the Reserve Board and banks, the PreSt-
dent could direct him to issue $3000,-
100000 in United States notes in de-
nominations from 81 to $4,000 This
money would be used to purchase and
retire Government obligations, the new
notes in the end replacing In the banks
or the possession of individuals So, ,0O0,-
100000 worth of Federal securities
Each year there would be appropri-
ated by Congress enough money to re-
tire per cent Of the outstanding notes.
bringing complete retirement after more
than IS years.
The Treasury's new currency would
be legal tender, and the intention Is to
have 1t backed by precious metal. gold
or silver.
Next, the President could say that
the gold dollar shall contain only 1l.6l
grains Of fine gold as against the 1922
now in it. This would make the dollar
Just half as valuable. make q shirt or
dress now worth 1922 grains OF fine
gold-or $1-worth the same 1922
grains Of fine gold, or 81.
50 Per Cent Gold Reduction.
The bill fixes at so per cent the max
imum amount the gold content Of the
dollar could be reduced. Any Presi-
dental proclamation making q reduction
would have to be predicated upon an
investigation showing the United States
Is suffering because Of deprecated for
eign currencies or upon an agreement
with other governments to stabilize the
currency at fixed level
Then the President for one year
could accept as much as 500 600 0O0
worth of silver from a foreign nation
as payment on a debt owed to the
United States. The maximum price at
which he could accept silver would be
SO cents an ounce. Silver now Is
around IS cents.
The silver received on debts would
be. held as q base for an issuance of
81 certificates-the common 81 bills
in an amount equal to the total dol
lars Of the debt payment. II, for in
stance, Great Britain paid her next
debt installment with 500, 900 900 worth
OF silver, there would be issued 100,-
900, 900 more 81 bills.
These certificates would be redeem
able at the Treasury In coined silver
dollars or subsidiary coinage-nickels,
dimes, quarters. II the silver went
above so cents an ounce the Govern
on which 1t could issue more currency,
but additional authority would be
needed.
All silver certificates redeemed at the
Treasury would be reissued. The
method by which 81 silver certificates
would be paid out Is left with the
Treasury. but one method would be
by using them to pay running expenses
Of the Government.