Evening star., 1933-11-23
RESERVE COUNCIL
FIGHTS INITIATION
Federal Banking Board Is
sues Broad Warning Against
Unstable Currency.

BY the Associated Press.
NEW YORK, November 23.-The
Herald Tribune said in a Washington
dispatch today that the Advisory
Council to the Federal Reserve Board
has warned the Roosevelt administra-
tion against "a currency of fluctuating
value"
The resolution, adopted in executive
session yesterday, and made available
to the Herald Tribune in authoritative
quarters. follows:
while the council is in sympathy
with the general purposes of the ad-
ministration, it believes these are not
to be accomplished by currency of
fluctuating values.
The members of the Advisory Coun-
Il. That higher price level is
beneficial only if accompanied by
higher natural income, and that can
only be brought about by increased
volume of business and Increased en-
Q. That a depressing and fluctuat-
ing currency value will not ADJUST
existing discrepancies in the price
level
Uncertainty Is Deplored.
"3. That as long as there IS uncer--
tainty in regard to the future value Oh
the monetary unit there can be no
lasting or fundamental Improvement in
business.
u That this uncertainty tends and
has tended to depress the market price
Of Government securities and corporate
and municipal bonds, which, in turn,
has affected and will continue to AFFECT
adversely the entire economic Struc-
ture and thus stand in the way OF re-
covery
IS. That unless there is monetary
sterilization it will become lncreaS-
ingly difficult for the Government to
finance its large commitments for re-
construction purposes and to retlna nee
its maturing obligations. The resulting
uncertainty will especially AFFECT ana
cause great uneasines5 among the MIL
lions of wage earnerS savings de-
rositors. and holders Of insurance poll
cies 1t will further diminish the flow
of capital into the investment field,
and 1t is this money which is used
largely for the purpose OF financing
the production of capital and durable
goods. 1t is in these fields that un-
employment has been most difficult to
overcome. The existing uncertainty has
already caused capital funds to leave
the country to be invested in foreign
securities ard deposited in foreign
hanks.
International Move Needed.
"6. That no monetary standards can
be finally and permanently SatlStac-
tory until other important nations have
taken similar acton and that such
international action is extremely i'm
probable cn any other than a gold
basis.
~. That history shows that the
further currency imitation goes, the
more difficult it becomes to control
and that it invariably results in untold
losses to great masses Of the people
and the ruin of national credit.
In view of the opinion above re
ported, the Federal Advisory Council
believes that in the re-esta blishment of
our currency bases on gold it may well
be coupled with safeguards to be agreed
upon By international action"
The members Of the Advisory Com
Gil and the districts they re...esent
ere:
Thomas M. Ste2l, Boston; Walter E
Frew. New York. Howard A. Loeb,
Philadelphia; H. C. McEldowney,
Cleveland; Howard Bruce Richmond;
John K. Ottley, Atlanta; Melvin A.
Traylor. Chicago Walter w. Smith
tpresidenD. st. Louis; Theodore Void.
Minneapolis; w. T. Kemper, Kansas
City; Joseph H. Frost, Dallas; Henry
M. Robinson, San Francisco. Walter
Lichtenstein is secretary.