Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-07-12
u. s. BANKS BLOCK:
TALKS AT FARLEY
Federal Reserve Board Holds
Resolution Now Is
Premature.
Continued From First Page.)

delegates took lunch together today and
afterward the Americans said the
situation was tranquil and they believed
consideration Of other questions could
proceed without difficulties.
The document which the Federal Re-
serve authorities declined to discuss laid
down certain general principles OF
monetary policy of central banks" II
was said to have been compiled by Leon
Fraser. American president Of the Bank
for International Settlements at Basel,
from material resulting from studies
trail banks for a year.
Among the principles specified In this
resolution was the following:
While gold should be allowed freely
to flow out of and into countries con-
cerned. central banks should always be
prepared to buy gold at a publicly an
nounced fixed price. expressed in their
currency, and to sell gold at Q publicly
announced fixed price, expressed In
their currency, the latter at least when
exchange rates reach the gold points. "
Aim of Banks Cited.
Another point was that central banks
aim should be to coordinate the policy
contribute toward the satisfactory work
ing of the international gold standard
system"
Another specification was that Cen
trail banks will have done what Is in
their power to reduce fluctuations In
business activity and therefore also
undue fluctuations in the purchasing
power of gold"
Only two subcommittee Of the Eco
nomtc Commission were scheduled to
meet today. One, on the coordination
OF production and marketing, Is con-
tinuing its talks on wine, and the other
is the Drafting Committee on export
bonuses, marks Of origin and the like
The question of adjournment was in
allegiance. although 1t was agreed in
some quarters the present slate could
be finished In two or three weeks.
MexicO's Proposal
As member Of the Conference Steer
ing Committee, Mexico made a definite
proposal relating to conference re-
cess and to carrying on the work in the
interim.
The two-point suggestion was made
public today. It's first item was propo-
Sition that the work of the conference
in the present session be confined to
studying questions recommended by the
Monetary Drafting Committee yester-
day and adopted by the bureau
The second provides that q per-
manent commission be created In order
to prepare study of questions now de-
ferred, as well as to convene in due
course the future sessions of the con-
ference"
1t was understood that Prime Min
ister Ramsay Macdonald, as president
OF the Steering Committee, commented
that the second proposal was a bit
History OF New Row.
Here is the history OF the fresh row
as given by a high authority.
The Central Bank document was
drawn up and approved fortnight ago.
although James P WarburR in giving
approval of the United States did SO
subject to Washington's consent.
The text was cabled to Washington
for concurrence in Warburg's approval.
Nothing was heard from the Federal
Reserve System and the American dele
cation assumed that this meant ap-
proval.
Yesterday evening it was said that
the delegation proposed this as the first
question to be considered by the sub
cOmmlttee To-Day. however, just to
make sure Warburg cabled Washington
and received word that the Federal Re-
serve System considered discussion now
would be premature.
Committee Confused.
In the subcommittee this morning
after Senator Pittman had announced
the Federal Reserve veto. he was re-
ported to have said that this meant the
Americans would be unable to discuss
any proposals having to do with Federal
bank reserves.
A japanese delegate, remembering
that Senator Pittman's own gold and
silver resolution mentioned Central
Bank reserves, promptly arose and
asked: You mean metallic reserves"
Had the Senator returned an af1rma-
tive answer 1t would have meant the
Americans could not discuss his reso-
luton, which they so ardently desire
adopted.
Senator Putnam however, indicated
that his remarks were directed to the
document relating to Central Bank CO.
operation.
The committee finally adjourned
much confused as to what they could
and could not discuss.