Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-04-20
STRATEGY Of GOLD
DECREE IS HAILED
Congress- InfIationary Moves
Back of Action, Finance
Experts Believe.
BY REX COLLIER.

Government experts on finance TO-
day hailed President Roosevelts action
in declaring America OF the gold
standard rs an effective bit Of eco
nomic strategy forced upon him by
radical inflationary moves in Congress
. strategy likely to have . salutary
effect on business generally.
Defending the President from pos
sible cries Of discourtesy with refer
ence to the approaching conferences
with Ramsay Macdonald Of England,
Herriot of France and Mussolini's
emissary, the financial authorities
pointed out that Mr. Roosevelt's hand
was forced in advance of the economic
parleys by Senate action on inflationary
amendments to the farm bill.
As a matter of fact, one high Federal
expert on international finance declared
the United States theoretically has been
OF the gold standard ever since the
issuance of executive orders against do
mestic gold Withdrawals from the banks
and restricting exports Of gold to other
countries.
Not Wholly on Geld.
The Presidents latest order he said,
merely tightens restrictions already
placed on gold without affecting the
gold content of the dollar.
Technically, he explained, America is
not wholly severed from the gold stand
ard so long as the dollar remains valued
in gold content. The effect of the
forthcoming international economic
conferences may be to revaluate the
gold content, which now stands at 1922
grains of fine gold.
The extent OF the expected boost in
prices and squirt In buying will depend
largely. 1t was pointed out, on the
psychologist reaction of the public to
news Of the gold embargo. The state
ment in New York of J. Pierpont
Morgan supporting the Presidents ac-
it was felt here.
this step while Macdonald and Her
lini's delegate Is en- route here has
strategic value. 1t should tend to in
duce England and other countries to
return to the gold standard as rapidly
as possible" the Government expert
remarked.
Thinks legislators Forced Move.
II believe, however, he might not
have made the move now, but for the
Senate action on the farm bill. This
inflationary move apparently forced i'm
mediate action, at the risk Of being con-
sidered discourteous to the foreign.
visitors. The step should serve to stay
radical infiationary moves in Congress"
R~tA ,1.s
that this country is on the gold stand
ing conditions:
/. When the unit Of currency Is ex-
pressed in terms Of gold
2. When the Government accepts
gold for minting at the fixed rate.
3. When all forms Of currency which
the Government and its central bank
issues are redeemable in gold on de-
mand.
4. When the Government permits free
import and export Of gold.
theoretically We went of the gold
standard" he said. when the Presi-
dent issued his proclamation instruct
ing banks not to pay of in gold GER
tificates or gold.
Granting Of Licenses Halted.
1Nat impaired, DuL OlQ not wholly
abolish the gold standard. The gold
standard was seriously impaired fur
ther on March 10, when the President
put an embargo on gold subject to the
condition that the Secretary of the
Treasury might issue licenses for the
export Of gold where needed in or
binary international trade. This ex-
ception was necessary because gold Is
an international currency.
What President Roosevelt announced
yesterday Is that no licenses at all will
be granted. We will accept gold from
abroad. Under the March 10 order the
Federal Reserve Bank of New York ex-
ecuted q species of foreign exchange
control designed to restrict foreign ex-
change dealings to transactions Of legit-
innate foreign exchange character. The
bank required daily reports of the pur-
chaSes and sales and an indication of
sources and purposes tor which sold
and also q daily report Of holdings of
foreign exchange.
Evidently it was the thought to avert
speculative dealings against foreign ex-
change. This functioned pretty we'll
until all this imitation talk began In