The border vidette., 1933-05-20
ECONOMIC HlGHLIGHTS
May IS, 1888

prices now and go to any possi
BILE length to do it," The ina
ton bill is the result of this
attitude. Presidential control of
Congress, 10 spite of appearance
of organized opposition, was
easily great enough to carry it
through. It's chief provisions
are:
The President may arrange
with the Federal Reserve banks
and boards for the banks to pur
chase in the open market and
hold up to $4,000, 100000 worth
Of government obligations, thus
providing an Identical amount of
new credit.
If this is inadequat. the Presi
dent may then direct issuance of
currency up to So, 900, 100000 to
retire government obligations;
reduce the gold content of the
dollar by SO per cent or any
smaller proportion; provide un
limited free coinage of silver at
a ratio of 16 to /; accept silver
up to 5000, 100000 in payment
of war debts in the next six
months, valuing the silver up to
so cents an ounce. With the ap
proval of the President the
Federal Reserve Board may de
clare the existence of au emer
gency, and increase or decrease
reserve balances required to be
held against deposits.
Of paramount interest, is in
fuence reduction of gold content
of the dollar would have on re
iations of debtor and creditor.
Expert opinion places it as fol
lows:
Debtors-following the deval
uation of the dollar, a man who
had contracted to pay certain
number of dollars could tender
the new dollar in satisfaction of
the debt. Principal classes to
be benefited in this respect would
be those who bad mortgaged-
homes and farms.
Creditors = Specifically, this
class would lose under the
changed basis. inasmuch as the
new dollar would have less pur.
chasing power than the old.
However. this apparent injustice
would be much Offset by the fact
that the loans we're largely con
tracted at time when the dollar
was worth only about half of
what it is worth at this moment.
{. Farmers-Would benefit. The
prices would rise, thus netting
the farmer more dollars. On tho
other hand. the cost of what he
purchased would rise as we'll,
but probably not so rapidly.
Manufacturer Wholesalers
Retailers.-The same condition
obtains as 10 the case of the
farmer. Prices of the goods
they sell will go up-and so will
the prices of the raw materials
they buy. Concerns with large
stocks of raw materials on hand
bought at present dollar values.
will naturally benefit.
Wage Earners-The man With
the fixed income will receive dol
lars which buy bin less. How
much hardship this will create
is dependent upon the rapidity
or the slowness with which
wages rise.
Unemployed - This class will
doubtless be benefited most. in.
asmuch as industrial operations
will increase, new markets. for
eign and domestic, will be found
aud there will be greater de
mands made on our reducing
units.
The parleys between the for
eign envoys and the American
government have produced five
concrete accomplishments in the
interest of world recovery, they
are:
l. The summoning of the
World E Economic Conference 10
London in the middle of June.
z. Toe formulation of tariff
truce to last until the conference
has had au opportunity to map
an economic peace treaty.
8 A ban on currency warfare
until the details of stabilization
can be worked out.
4. An impetus to Geneva dis.
armament conference, with Am
erican pressure for reduction
supported by q willingness Of
United States to extend lis for.
eign policy of formal consultation