Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-03-07
COUNTRY AWAITING
FEDERAL GUIDANCE
Gold Embargo Necessary to
Conserve Metal as Basis
for New System.
BY DAVID LAWRENCE.

A nation calmly waiting the guidance
Of Government in the biggest emergency
since the war and President moving
vigorously and aggreSsively to mobilize
the banking facilities Of the country
into an orderly attack on the problem
of debt adjustment-thi is the picture
Of the first days of the new administra-
ton
From all over the country come ex-
pressions Of confidence that plans In the
making will be patiently worked out in
the hope Of an early resumption Of
banking operations. The unity Of the
people is matter Of deep satisfaction
here as it is realized that all the cir
cumStanceS are new to the present gen.
Grafton and that without medium Of
exchange business can hardly proceed.
Holiday Provides Time.
What the bank holiday has done is
to provide time. Already the regula-
lions being issued by the Secretary of
the Treasury reveal the plan of gradual
return to normal. but it will take several
days before Clearing House certificates
can be issued and the machinery set up
for partial Withdrawals Of old deposits.
Technically the gold position Of the
country may give the academicianS
plenty Of opportunity for debate, but the
fact remains that the gold supply has
been conserved and that the strong arm
OF Government stepped in to prevent
its exhaustion.
II anybody has any doubt that the
emergency proclamation Of an embargo
was necessary. let him find out what
was happening at the windows Of the
strongest banks in the last few days of
the past week. The Withdrawals were
too heavy to be withstood by any insti
tuition, and the gold demand, foreign
and domestic. was insuperable. It
would have forced America of the gold
standard in a few days. As it is gold
has been retained as a basis for setting
up a new banking structure. The
dollar is still the dollar of the gold
till credits and debts can be figured
out on basis that will be accepted by
everybody as sound. In large sense
the Government is auditing the banks
and reclassifying assets SO that every
body will know what values really are.
Congress to Act This Week.
This reorganization was inevitable
but everybody wondered how 1t could
be done lawfully. Recourse to the old
statute known as the trading with-the-
and again and it did afford a basis.
though lawyers will still argue whether
Il really covered a peace-time situation
In any event Congress Thursday Of this
week will have an opportunity to pass
confirming legislation before the holi-
day is over and this will tend to pre-
vent future litigation on the points in
volved. It is possible that the broad
powers of emergency possessed by q
President under the Constitution might
be invoked as sufficient ground for the
action taken but ell doubts will be
cleared away by action Of Congress and
meantime the emergency has been met.
While Government officials have beer
working night and day and conferences
have been going ON at the Treasury anc
the Federal Reserve Board almost con-
tinuously, with stats on hand ready tc
execute orders and draft regulations
Washington has externally been calm
and the moment the new President got
into action feeling developed that de-
cisive strokes would be taken.
All indications point to a reopenine
Of the banks on checking basis by the
end of this week, but the impoundine
of the gold supply will continue till
confidence has returned.
T.; Copyright 1033)