Evening star., 1934-01-18

! so, that the Government should control
and possess the gold supply of the coun-
try. Already, under authority given him
by Congress, he has compelled tndivid-
| uals and corporations to surrender the
| gold in their possession, for which
lawful money has been paid.
In our Federal Reserve system there
| Is now held about two and one-half
billions of dollars in gold. The Presi-
dent feels that this agency should
surrender its gold, as have other Amer
ican institutions and citizens. The
Federal Reserve system will lose nothing
thereby. The Government will issue
to these banks the same character OF
gold certificates which it has issued to
its citizens. When the value of the
American dollar is stabilized, as in all
probability it will be under international
agreement, this government will obtain
considerable profit for the American
people, as it should obtain from the
devaluatlon process. II IN tne eno, tne
| American dollar is stabilized at go cents,
the Treasury of the United States will
pe bops N ane af amoI do1lafs the
stabilization is at so cents, the profit
will be four billions Of dollars.
There has been some fear mani
1
| over the fluctuations in value OF our
| dollar. To remove that fear, SO that
business may go forward without hesi-
tation, the President has clearly set
| forth in his message to the Congress
and the Congress will so legislate-that
he cannot devalue the dollar at a
| higher price than 60 cents. It is a
most constructive suggestion that he
| be permitted, when the time is ripe,
! to stabilize the dollar within the range
of SO and 80 cents valuation. With
that power granted to the President,
we can be assured that favorable ex-
change balances will be obtained, that
our exports will continue to increase
J and that American interests will be
/ protected abroad. OF course, in the
end this large accumulation Of profits,
amounting to several billions Of dollars,
will be employed in reducing the Ma
tion's Indebtedness.
| Precedent in Europe.
But for the time being. a large
part of it can be used to the Gov
ernment's advantage in an equalization
| fund, as suggested in the Presidents S
message, to protect American exchange,
to restrict the climb Of the dollar up
ward and to combat foreign agencies
which are working against our none
tary policies for their own benefit.
There is nothing exceptional in this
suggestion, because we are only doing
what England and France have already
done. For very long time England
has kept active a fund Of more than
the value of the pound sterling or the
American dollar throughout the Brit
| ish Empire as it sees fit to do.
| This latest move of the President will
| not only restore better equilibrium
between commodity prices and land
values and the American dollar, and
| will not only ultimately place several
billion dollars in the United States
Treasury but it will open new oppor-
tunities in enlarged fields for the sale
of our surplus products and will hasten
stabilization understanding and give
assurance and confidence to business
and investments. OF course, there Is
some opposition to the Presidents sug-
gestions. Some will feel that the men,
ber banks of the Federal Reserve sys-
tenn should retain for themselves the
profit on this gold; others will cry out
constitutional inhibitions and raise
legal technicalities, but in the Congress
the Presidents message was received
with acclaim, and legislation incorporat-
ing his suggestions into law will be
passed at very early date.
Aside from the advantages that are
| apparent and the assurance of a re-
| duction in our national debt. there are
other reasons why the American people
should feel encouraged by this bold and
constructive stroke of the President.
Our financial structure is sound. Timid
/ souls were somewhat alarmed when re-
Gently the President transmitted to the
Congress his budget message, stating
that the Government would have to
borrow approximately six billions OF
dollars in the next six months. It was
very frank message. It was typical
of the President, who believes that the
best way to win and to hold the con-
fidence Of the American people is to
give them the picture, good or bad, to
withhold nothing from them-because
we are all parties with him in this
great fight for economic recovery.
The very large deficit revealed in the