Evening star., 1933-02-12
DEARHH OF MONEY
DENIED BY. MILLS:
"ManipuIation' Opposed by
Treasury Head in Speech
Read in Kansas City.
~ the Associated Press.

~ the Associated Press.
KANSAS CITY, February 11.-Secre-
tary of the Treasury Ogden L. Mills. in
q speech read here tonight before the
Young Republicans of Missouri, declared
there is no actual dearth of money, OPP
posed imitation of the currency and at
tributed current economic stress to "un-
certainty and lack of confidence"
The Secretary's speech was read by
John Jay Hopkins, special assistant to
Mr. Mills, who was unable to leave
Warrington.
Summary Of Views.
In summary of his views, as ex-
pressed In the prepared address, aecre-
tary Mills said:
Il believe that balanced budget at
home, reduced costs of government, the
orderly adjustment of debts, the stabili-
zation OF currencies and exchanges, an
easy money policy on the part of the
central banks, the gradual removal of
exchange restrictions restoring the free
now of international credit and the
elimination of arbitrary and abnormal
trade barriers would, il combined into
general economic program, so free latent
aha P0WCAA lVl CCS DIS NJ OIlC6 W
late, on worldwide scale business re-
vfval and price recovery, and that this
time the forward movement would not
be temporary and short lived, but per-
manent and progressive"
Discusses Imitation.
Discussing cure he said was widely
advocated. Government manipulation
OF our currency and monetary system to
bring about what is commonly known
o. imitation" Secretary Mills wrote:
They start with the unwarranted as
sumption that the supply of gold and
money both in the world and in the
United States is inadequate to support
satisfactory price level. As far as the
world Is concerned, since 1918, the
world monetary gold reserves have in
creased from nearly billion to about
~ billion, or nearly $50 per cent, while
the production Of basic commodities at
the highest point Of 1929 was nearly
one-third larger than In 1913" 1
AS Tar as this country is concerned"
ne continued, "as compared with 1929.
our gold stock has increased, our bank
reserves have increased and currency
tnus increased. The present difficulty
arises from inability to put to work
our ample monetary reserves.
brute Force Useless.
Credit cannot be brought into active
use by brute force The increased en-
ployment Of credit depends upon an
expansion OF business activity-that is,
the buying and selling of commodities,
employment of labor and the accelera-
ton OF all the manifold economic ac-
tivities that form part Of the modern
economic mechanism. What Is holding
hn ak IL tfyxa 4oflvx ~ 1l L. -
1idence. - -. .
Explaining the workings of imitation,
MI. Mills described what he said would
happen II the gold content of the dollar
was cut in two. rs has been advocated
In some quarters.
THE theory" he said. "is that the
American farmer, who now sells q
bishel Of wheat IN Liverpool for about
three shillings. which he now converts
into about SO Cents bushel, would, II
the gold value of the dollar were cut in
hah receive 4 dollar q bushel; and
since the world price largely determines
the domestic pEtGk Of, wheat, the price
OF wheat ut home would rise to 81.
Theory and Fact Part.
"It Is assumed that the world price
level would remain constant. This Is
where theory and fact part company,
II next MONDAY morning the American
farmer found that he could get 81 for
his wheat in Liverpool. you can rest as
sured that every vessel leaving the
United States would be loaded with
wheat. Ag~
THE price at Liverpool would break
This Is 80 certain that it would have
broken before even an extra bushel from
the United States reached that market
It is impossible to say where the price
Of wheat wouN ultimately settle, but
certainly far under a dollar and prob
ably not far above present prices"
Declaring that British prices have
shown no marked increase since Great
Britain was forced of the gold standard
IN September. 1881, Secretary Mills said
the fact that the United States,
France and few other countries have
remained on the gold standard Is the
one element Of stability in the world
today" e.e