Western news and the Libby times. [volume] (Libby, Mont.) 1920-1933, 1933-05-04
.1[ltllI'liitll99l9}2 fSliij{lle(k
National Topics Interpreted KB fT9SY7F'f&
by William Bruckart nrI31AT

school of thought thatzthe dollar has
fiuctuated and that the commodities
constitute the thing of fixed units of
value. Consequently. when Mr.. Roose-
velt's action caused an increase In
commodity prices. this group argued
the dollar was and Ind been too
dear" and ought to be made cheaper.
Similarly, they asserted there had been
shortage of currency throughout the
depression and that there could never
be sufficient currency IL the gold basis
were continued. This was SO, they
claimed, because there was not enough
gold In the world to permit retention
of a gold backing for each dollar OF
currency.
The strength of those favorIng a
greater amount OF currency was In
creasing numerically
Free Coinage through the last
of SiIUer several years. Con-
seQuent1y. there
were more Of them In congress. This
Is attested by vote which the senate
took on an amendment to permit free
and unlimited coinage of silver. The
amendment was defeated. 1t Is true,
but the vote showed SO senators In fa-
vor of 1t compared with AZ nays. That
is the largest vote polled on the ques-
ton in more than 30 years.
In the meantime, the President was
getting ready for conferences with
the heads of eleven foreign govern
ments on economic and financial ques-
tions. Most of those nations were
using exactly the same basis of cur
rency as ours became after support
for the dollar was withdrawn. He en-
terms. insofar as currency was con-
cerned.
But the departure from thea gold
lation. Hence, the President analysed
what was needed and asked congress
to give him the authority to employ
whatever was needed. He appeased the
demands OF. the inf1ationlsts BY telling
them to put into the legislation au-
thoritv for him to use any or all OF
their several schemes Ia his discretion.
There Is nothing mandatory about
them. He can use the powers or not
as he chooses, or as the pressure of
public opinion makes given course
OF action seem advisable.
Under the terms OF the legislation.
negotiations are permitted between
the Treasury and the Federal Reserve
board and the Federal Reserve banks
whereby the Reserve banks would buy
3,0O0,0O0000 worth of government
would be given cash by the reserve
institutions in place of their securI-
tiesse Thus. banks holding government
bonds would be given cash Instead of
Understanding bonds, and the theory
Is that since the cash would not bring
them a return, they would seek to
make loans that would provide inter-
est. If 1t works that way. 1t means
age use Of money In business enter
prIses. A condition known as an easy
money market" would obtain.
1t rs to be remembered, however,
that the Federal Reserve Banks are
sipriyate
As GTeenbdcks banks vt Is possl-
Were Issued BILE for them to re-
fuse to buy the
government bonds In the manner sug-
gested, SO the law provides that the
Treasury may buy s3,0O0.000,000 in
government bonds and pay for. them
In UNITED States notes." just as were
issued In the days of the greenbacks
after the Civil war. This would pour
Just S3,0O0,0000OO of new money into
circulation. It will have either gold or
silver back of it, but 1t remains to be
determined which and In what amount,
so 1t is an inilationary provision.
In the case Of purchase by the Fed
eral Reserve banks of the bonds In
question, the law provides that the
Federal Reserve banks will hold them
for a stated period, but II the new
money was issued by the Treasury to
pay the bonds, sinking fund Is set
up to retire the notes. 1t Is provided
that at least per cent of the out
standing United States notes would be
retired each year through an appro-
priation Of funds by congress for that
purpose.
Another provision OF the law allows
the President to change the value OF
the gold dollar. Under the previous
law, 1t was required that gold dollar
should contain 25.8 grains of fine gold,
or pure gold as we know 1t. The new
law. however. gives the President pow
err to reduce Tat gold content by as
much as 80 per cent.
The third major section OF the law
allows the President to accept silver
from foreign governments in payment
of their war debts to the United
States. He Is limited In this respect,
however, and may not accept more
than s1OOOO0.O00 In any one year, or
about one-third of the annual pay