Evening star., 1933-04-21

mittee hearing before the session was
over and said Secretary Woodtn had
agreed to the bill.
with this BILL" Thomas quoted the
Treasury chief as saying, 1.-The depres-
sion is over. If administered in q busi-
nesslike way we can combat anything.
Indicating the credit expansion pro-
vision would be used at first, Thomas
said there never has been any idea
of turning imitation loose"
After the committee had been in ses-
sion almost two hours, Secretary Woodin
emerged and summoned Walter Wyatt,
general counsel Of the Federal Reserve
Board, to come down from the Treasury
for consultation.
Before the committee met Senator
McNary Of Oregon, the Republican
leader, said he probably would call a
party conference tomorrow to formulate
its attitude toward the sweeping pro-
posal, while Senator Reed clung to
his original plan to debate it at length
to point out its dangers" to the public.
Senator Robinson of Arkansas, the
Democratic leader had announced
President Roosevelt was in accord with
the purposes of the legislation and
would permit adequate debate.
But he does not want unduly to de-
lay the farm bill which already has
been before the Senate nearly three
weeks, and he is ready to call halt
when he deems it necessary.
The administration spokesmen ex-
planned to the Senators that the con-
trolled imitation" proposal would be ini-
tiated in practice as an expanded
| credit" arrangement, with provision for
| purchases in the open market by Fed
eral Reserve banks of $1,000 600, 900 Of
Government securities. If such pro-
gram did not work out, the President
would be authorized to issue $4,000, ,000,-
900 in Treasury notes or currency, re-
duce the gold content of the dollar up
to so per cent, or accept 100000, 900
of the war debts in silver at SO cents an
ounce
At the Treasury. meanwhile. admin
istration efforts to have the Federal Re-
serve Board and governors Of the IL
Reserve banks approve plans for the
system at once to expand its open mar
ket operations in heavy purchase OF
Government securities was being pressed
before a Joint session of the governors
and board.
It had been hoped to get approval
of supplementary plan for the sys-
tenn to begin the operations as far as
possible under present laws at once
on the theory that to do so would aid
in the administrations general scheme
of continuing the improvement in busi-
ness brought about in the last few days.
Secretary Woodin, while declining to
discuss how the board and governors
had viewed the proposition. was said
to have presented the plan at a confer
ence Of the governor and the board yes
terday
Decision Up to Governors.
The governors of the IL banks form
the open Policy" Committee of the
Reserve system. deciding what securities
should be bought or sold to support and
aid business of the country.
The Federal Reserve system now owns
81 1877 100000 of Government securities
| purchased largely to aid banks year
ago When the policy was inaugurated
it was with the idea that the purchase
Of the securities would build up the re-
serve of member banks throughout the
country and make possible freer exten-
| sion of credit to business and industry.
The board continued its purchases
| until more than a billion dollars OF
the securities had been added to the
| portfolios of the bank. The amount
of Government securities now held is
$759. 1000, 900 more than a year ago,
and constitutes rs per cent of the total
Reserve Bank credit now outstanding.
As the Senate Committee got under
way, reports circulated that proposed
substitute plan was under considera-
ton declaring a new monetary policy
under which a stabilization board
would maintain commodity prices at the
1926 level.
This plan, which was not expected
to receive serious consideration, would
direct the Secretary of the Treasury
to purchase Government obligations at
the rate of $300,000000 a week until
the 1926 price level had been reached,
and to sell or purchase after that to
maintain that level.
So much interest was shown In the
imitation program that many Senators.
not members of the Banking Com
mittee, attended the executive meeting.
Once the Senate passes the farm
bill with its imitation rider, House
leaders do not expect to accept it with
the numerous Senate amendments, but
rather to insist en- the differences be-
tween the two branches being recon-
ciled in conference
Representative Byrns. the Democratic
leader there, predicted to newspaper
men that the currency expansion propo-
sition would be accepted by substantial
House majority.
We've reached the point where we
have got to have some currency expan-
sion. or else" he said. terming enact
ment of the farm bill necessary because
imitation would be too slow to remove
the need for immediate help for the
farmer"
Byrns does not expect the expansion
plan to bring drastic imitation, however.
THE reaction We get in the next few
days" he said, "might-I'm not at all
increase in prices than the expansion
justifies. In other words, prices might
rise very high very soon, only to drop
back a little when the expansion pro-
gram has begun. From that point
onward the rise should be in proportion
to the expansion"
Will Fight Wide Power.
Once the Thomas bill is in the Sen
ate, the Republican forces intend to op-
pose the unprecedented grant of power
to Mr. Roosevelt long enough to arouse
public sentiment and to show the coun-
try, as Senator Reed said, what has
happened in other countries that have
taken this course"
An official explanation of the legis-
lation, introduced late yesterday after
a day of feverish conferences during
which the rising prices on stock COM
modify exchanges drew a variety OF
comment, said the purpose was to re-
store commodity prices, hold them up
and then create expansion, not Of cur
rency, but of credit, and to make 1t
easier for Mr. Roosevelt to take inter-
national action for currency Stabiliza-
ton.
1t was added that nothing Of the
printing press or unregulated imitation
was contemplated.