Evening star., 1933-01-08


times the amount of gold in gold dol
lar. had the lame intrinsic value.
There seems little chance OF Senator
Wheeler's bill for free coinage of silver
on the Bryan 16 to l ratio making head
way The western members of Con-
gress are not a unit in support of 1t.
The objection to bimetallism without an
international agreement for similar
standard in other countries is that;
under Greshams law, the baser metal
drives cut the other. Gold would flow
out, with a consequent difficulty in
maintaining a parity between the two
metals and the soundness Of the none
tary system
A larger measure of support Is being
given to bills such as that of Senator
Key Pittman of Nevada, who would
have the Tree sury purchase up to
100000 ounces of silver monthly, pay
ing for it silver certificates This plan
is similar to that in effect under the
Sherman law Of 1890, which was re-
pealed in 1898 after it was held to be
factor in the depression of that year.
| The silver would be purchased at mar
ket prices, but the effect presumably
would be to advance the prize. Re
Gently silver has dropped below 25 cents
an ounce. A price of about 65 cents
Is regarded as normal While bimetal-
lism prevailed, the silver IN a standard
silver dollar was worth about a dollar.
Now 1t Is worth only little more than
20 cents.
Mills Position Given.
In opposing the Pittnan and similar
bills, Secretary of the Treasury Mills
has taken the position that the action
proposed would be a subsidy to the
silver industry, that there is no need
Of additional currency and that it is
especially desirable not to issue more
currency outside the control of the
Federal ReEerve System.
The American Farm Bureau FEEDER
atoms plan for a revaluation of the
gold dollar, as recommended at its
convention in December, calls for an
increase of the official price of gold
from about $40 to $50 per ounce and
reduction in the redemption value of
all monetary units to is grains to the
dollar to conform thereto. The weight
of the present gold dollar is 258 grains.
the pure gold content being nine-tenths
of this amount.
The change in the official price of
gold would be designed to restore the
purchasing power of the gold dollar
In terms Of commodities to the basis
which prevailed between 1921 and 1929
Thereafter the price would be regu-
lated by a Treasury bureau with a view
to preventing fluctuations in purchasing
power.
The objection to the plan for the
revaluation of the gold dollar. in the
opinion of the financial authorities of
the Government, is that discussion of
such a proposal in Congress would
preclpltate both here and abroad a rush
to convert all forms of currency into
gold. The demand for gold, in antiei-
patton Of a lower gold value of paper
currency or higher prices for the gold.
would be so great, according to their
theory, as to endanger the gold stand
ard even in advance of the enactment
of any legislation. They doubt if q
century-old valuation of the gold dol
lar could be upset without causing a
new set of difficulties.
Farmers Planning Drive.
Despite these objections, the American
Farm Bereau Federation Is preparing
to make drive for the legislation in the
new Congress as supplemental to the
Goldsborough price stabilization bill
The latter bill instructs the Federal
Reserve Board, the Federal Re-
serve Banks and the Secretary of
purchasing power of the dollar pre-
Vailing in the 1921-192o period by con-
troll Of the volume of credit and cur
rency. 1t was opposed by Treasury
and Federal Reserve officials on the
ground so many factors are involved
that it is impossible to control prices
by these means and that it would
be unwise to lead the public to believe
that it could be done. The Goldsbor-
ough bill as passed by the House last
Winter is expected to die on the Senate
calendar.
Such bills as that introduced by
Representative Louis T. McFadden,
Republican, of Pennsylvania at the re-
quest Of the Crusaders Of Economic
Liberty, for a new monetary system
based on human effort" have seant
chance for favorable action.
Taking together all the different
schemes to increase the volume of
money, their combined backing pre-
sents a strength probably sufficient to
make the currency issue a dominant
one in the new session of Congress.