Evening star., 1933-01-08


additional reserves.
Would Finance Mortgages.
2. Currency Secured Otherwise Than
by Gold or Silver-The Frazier-Sln-
r-Patman bill, backed by The Ma
tional Farmers Union and approved
last Spring by the Senate Committee
on Agriculture, would provide for gov
ernmental financing OF farm mortgages
at face value by issuance of Federal Re-
serve notes without gold backing and
covered only by bonds secured by first
mortgages on farms. The Landlord
! (Georgia) bill provides for the issuance
of circulating Treasury notes secured by
first liens on farm property to the
amount of 80 per cent of the value of
such property. The Campbell penn
sylvania) bill provides for the issuance
of full legal tender Treasury notes at
the request of States, counties, munich
palities or townships which present as
security bonds based on local public i'm
| provements. The Kelly (Pennsylvania)
bill provides for the issuance of SIS ,000,-
00G,0 900 Of emergency credit bonds ex-
changeable for Federal Reserve notes,
for deposit with banks for use in max
ing loans designed to stimulate industry.
3. Currency Secured by Government
Bonds Heretofore Issued-Congress in
| spite of the opposition of the admins
| tration, experimental with mild form
of controlled imitation of currency by
approving the Borah-Glass amendment
to the Home Loan Bank law, permitting
an increase in national bank notes by
| giving bonds bearing interest at 3ss
| per cent and less, the circulation privi-
| lege hitherto held only by per cent
| hOy1dc T1hnro &c cot1ttp1ov,f fap
an extension of this authorization be-
yond three years, as now provided. The
principle of bond-Secured currency was
involved in a restricted manner in the
Glass -Steagall act, initiated by the ad-
ministration, which permitted subStitu-
ton of Government bonds for eligible
paper as security for Federal Reserve
notes, but without changing the re-
quirement for bold cover of at least
| 40 per cent The present Congress will
be asked to extend the one-year au-
thorization in the Glass-Steagall act.
The Keller bill would give all bonds of
the United States the circulation priT-
lege, while the Keller-Walsh (Massa-
chusettS) bill would create an emer-
gency circulation fund to furnish cur
rency to banks, corporations or citizens
| depositing Government bonds.
Many Proposals on Silver.
4. Currency Based on Silver.-There
are several different plans for increas-
ing the part played by silver in our cur
| rency system. The silver group believes
there is world shortage and maldis-
tribution of gold and that the none
tary base should be broadened. The
Wheeler-Evans bill proposes free coin
age OF silver at fixed ratio of Is to /.
The Pittman and Arentz bills provide
for the purchase by the Treasury of up
to 100000 ounces Of silver monthly,
silver certificates being used in pay
mont and the bullion being coined into
silver dollars for the redemption of the
certificates. The Somers, Gross, Glover
and Borah bills provide for the pur-
chase of silver and the issuance of silver
certificates under various different
methods. The Somers- Hayden resolu-
| ton provides for acceptance of silver
in payment Of foreign debts and the
use Of such silver in the currency sys-
tenn.
5. Revaluation of the Gold Dollar
Under the compensated dollar plan, in
Volving regulation of the gold content
Of the dollar, there would be automatic
adjustments, with view to keeping it
at point where dollar would always
buy fixed quantity of goods, as deter
mined by the index number of the gen.
eral price level. The American Farm
Bureau Federation proposes what
amounts to so per cent increase in
the official price of gold, to correspond
to the appreciation in its purchasing
power. The redemption value of out
standing paper currency would be low
cred. The official price Of gold in the
/ fI1t1Trp TNrl1d ha oHilictad CO f1 ~,
| tain the purchasing power of the gold
dollar at the 1921-1929 level There
have been pending in Congress for some
time the Busby, BurtnesS and Colds
borough bills, embodying plans of Prof
Irving Fisher and other economists for
controlling the value of the gold dollar.
Would Use Federal Reserve.
6. Expansion of Credit and Cur
rency Though the Federal Reserve
| System.-The Goldsborough bill, which
was passed by the House last Winter
and is pending in the Senate, contem-
| plates control of the price level by the
use of the powers of the Federal Re-
serve system, which include its So
/ called open market operations under
which the Federal Reserve Banks ex-
pand credit and currency by buying
/ NNOFSA AAAAiSA4b DOll>lO- 1IlC ENtIuSCyCt -
Dickinson, Strong and Keller bills are
similar in principle to the Goldsborough
bill. An early draft of the Goldsbor-
| ough bill conferred power upon the
Federal Reserve Board to control the
| official price of gold. The American
Farm Bureau Federation has sponsored
the Goldsborough bill, but now is CIV
ing precedence to the gold control plan
because of the failure of recent open
market operations of the Federal Re
serve system to influence commodity
prices.
Z: New Monetary Plans.-The Nc
Faoden bill embodying the ideas Of a
secret organization known as the Cru
Saders Tor Economic Liberty would
abohsh the gold standard and the Fed
cral Reserve system and set up a new
monetary system based on human
effort" the standard of value being
the wages Of unskilled common labor
Suggestions outside Of Congress for new
monetary bases have included electrical
energy and various commodity stand
ards.
Currency imitation has been a ira
ditional remedy for lower prices in
periods of hard times. 1t was the hope
OF obtaining higher prices that the
farmers rallied In considerable numbers
to the currency imitation free silver
plan Of the Bryan campaign of 1896
Seek TO Increase Money.
The theory of those who now advo.
cate currency imitation is that basic
difficulty in the present depression i.
shortage of the circulating medium
BY providing more money it is con-
tended that the purchasing power oi
the people will be increased. bushes:
and industry will be stimulated. price,
of commodities will be advanced anc
prosperity will return.
Admitting that the official figures or
currency In circulation show a higher
; total than during the pre-depressior
; period of prosperity the infiationist,
, argue that considerable part of 1t 4.
boarded and that, for various reasons
only about half Of 1t is in active use.
Those who oppose ali imitation