Evening star., 1933-05-04
The Political Mill
By C. Could LiNccln.

What IL President Roosevelt going to
DO with the broad powers o6 currency
imitation given him by Congress? Both
Senate and House, by votes Of more
than > to /, have agreed upon the In
dation amendment, the Thomas amend
ment, to the farm bill. Within q week
the measure Is expected to be law-As
soon a. the differences between the two
houses over the farm relief bill itself
have been adjusted. The country now
knows just what the imitation legisla-
ton Is to be.
BY leaders Of his own party In Con-
gress the President is expected to make
use of these powers without loss OF
down to something approaching normal
He Is not expected, however, by these
Democratic leaders to 20 about the mat.
They do not, for example, believe that
Government print "greenbacks"-pape,
money With nothing except the credit
OF the Government back Of 1t. They
do not believe that he viii lessen the
gold content Of the gold dollar, nos
do they expect him to adopt "free silver
and q sixteen-to-one ratio fc. silver
and gold, although authorized to Dc
these things In the bill.
\
The President, however, Is expected
Immediately to make use of the pro-
vision which authorizes the Federal Re-
serve Banks to 60 into the open mar.
ket and buy Government bonds, against
which more and more currency may
be Issued. Furthermore, 1t Is expected
that the provision authorizing the Presi-
dent to accept up to $200, ,000, 900 In sill:
yer in payment Of the foreign debts
due this Government June Is, with sill
yer to be valued at SO cents An ounce
will make 1t certain that the June pay
ments will be made to this Government
and that oliver certificates will then b
issued againat this silver, thereby in
creasing the money in circulation and
also helping greatly the silver market
Senator Thomas, author of the infia-
ton measure which was tackled on a.
rider to the farm relief bill, says
that there Is no reason for any delay
whatever In starting the imitation
wheels moving. He adds that If the
present Federal Reserve Board does not
under direction OF the President, SET
in operation the provision calling for
large purchases Of Government securi-
ties by the Federal Reserve Banks, and
the issuance Of currency against the
securities, there will have to be q new
Federal Reserve Board. The inf1ation-
lists in Congress, he says, will demand
to. know the reason why II nothing II
now done. There is no reason in his
opinion, for the administration to wait
finally until the farm bill becomes Law
to begin such operations.
Ax
Senator Thomas conferred at length
with the President before the admin
tstration came out squarely In sup
port Of his imitation amendment. It Is
believed that he knows what the Presi-
dent has IN mind with regard to the
matter OF imitation, although he doea
not predict what the President will do
y r j.
II the provision for the purchase OF
Government securities by the Federal
Reserve Banks does not provide q suf-
fcient increase in circulating cur
rency, the way is open for the Govern
ment to begin printing Treasury notes
"greenbacks." Furthermore, when the
Government begins the issue of new
bonds and securities to take the place
OF those now out or to finance new un-
dertakings, like public works programs
should the people with money in thta
country fail to subscribe to these secur-
tiles, the Government will be in q
position to issue the greenbacks to buy
up Government bonds. This power viii
be club In the hands Of the Govern
nient. 1t Is not expected the President
viii do anything at this time about
cutting the gold content Of the dollar
gold.
However, as was pointed out, tht
power given the President to reduce
the gold content of the dollar or estab.
hsh ratio between monetary rilve,
and gold may be used with effectiveness
by the President to aid the Interna.
tional Monetary and Economic Confer.
ence opening June IL in London II
reaching an agreement to stabilize cur.
rency ana foreign exchange.
According to Senator Thomas ant
otner lnnationists the dollar up unit
recently has been worth about So. 40 q,
compared to the value Of the dollar II
normal times. Unless 1t is broughl
Gown and prices go up. there can b,
no eno OF the present defiation, which
has been going on with disaster to th,
country's business for several years,
u
Not all Of the infationists in Con.
gress, however, are likely to be conten
with q limited use Of the powers granted
the President under the Thoma,
amendment. For example, Representa-.
tive T. Alan Goldsborough, Democrat
OF maryland takes the position tha,
rising price level, such as followet
the discoveries Of gold in South Africa
cation by President Roosevelt Of tn,
gold revaluation section OF the imitation
amendment. The Marylander continues
to press for legislation to stabilize pric,
levels and the currency. He has q bill
Tor this purpose already introduced. I
would establish q national monetar,
board to stabilize the price level anf
purchasing power of the dollar.
Mr.. GoldSborough contends that tn
administration, by going of the golt
standard and embargoing gold, has les
sened the demand for gold and startet
rise In the price levels. The imitation
measure now accepted by both houses
of Congress, he says, will give the coun,
try further rising price levels III availet
OF fully" Mr.. Goldsborough expresse.
the belief that the administration ha.
in mind permanent legislation which
would stabilize the currency and pric,
level. He believes, too, that such AZ
example by the United States woult
be followed by other nations and thai
this country and the rest of the worlt
are now definitely headed toward {
period Of rehabilitation and great pros
perity.
\
The Goldsborough bill has the SUP.
port Of some Of the farm organization.
and Of groups Of Industrial and business
leaders, he insists. The Committee fol
the Nation, Of which James H. Rand
jr. is the directing chairman. with
headquarters in New York, Is BACKING
the Goldsborough bill. In q recent
bulletin this committee said:
"The cause of the depression was {
breakdown Of fair price levels. Thi
uyoc hroyIuhf about Nv,