Evening star., 1934-04-22

IIle uIpluS OI american IdTm pTOO-
ucts, so that there will not be any
necessity for the A. A. A. to try to
control production.
The third argument IS that if
something is done for silver, the min
ing industry will be aided and jobs
will be created for workers in the
West.
However, the economic planners are
not particularly impressed by the
claims of the silver devotees.
They point out that the Chinese
and the Indians aren't strong on
wheat or pork or the other farm
products that We export in large
quantities. and in any event do not
have the money with which TO buy in
large quantities.
In the case of wheat. they assert
that England, Italy, Germany and
France, which formerly were mar
ketS for the American product, are
largely lost. England gives preference
to Canada and Australia in its pur-
chases. Italy has fought its battle
of the wheat" and grows enough for
home consumption. The same is true
Of Germany and France. where the
aim is to become self-supporting in
agriculture.
1t is much the same with other
farm products. So the planners want
to obtain power for the President to
bargain for markets through trade
agreements, as other nations are
doing. This plan has passed the
House and now is in the Senate. In
the meantime they want to get pro-
duction under control. and to keep it
under control. so that there Will not
be such wide price swings
1t is the contention of the eco
nomic planners that, while the broader
use of silver as currency may be JUS
tilted. such use is not going to be a
panacea for the country's troubles
Currency War.
A dollar still further cheapened,
either by the addition Of silver or by
the addition of a big supply of paper
currency, would, in their opinion, lead
only to currency war or to the use
of tariffs and quota restrictions to
block out American products.
President Roosevelt obviously is
seeking to steer a middle course. He
has definitely informed Congressman
that he would veto the plan of Repre-
sentative Mcleod of Detroit to pay off
depositors in closed banks with new
currency. He would do the same
thing to the plan of Senator Frazier
of North Dakota to refinance farm
mortgage debts on per cent in
tereSt basis.
The Mcleod plan calls for payment
in full of deposits in Federal Reserve
member banks that failed to open
after the March, 1888, moratorium.
1t is estimated this would take
81 300 100000 That amount of money
would be issued against the frozen
assets of these banks.
But after the Government had paid
national bank depositors there imme-
diately would arise a demand to pay
State bank depoSitors. That would
take another $4,000 100000. Also
large sums of money were lost in
banks that closed earlier in the de-
preston. In fact, ever since 1920
waves of bank closings have swept
various parts of the country. To pay
off one set of depositors and ignore
others is not the Presidents idea of
justice. In any event, payment would
jeopardize the Federal credit, and the
plan will be vetoed if it gets by both
houses.
Kept From Vote.
The maneuver in the case both of
the Mcleod bill and the Frazier bill
is to keep them from vote. Senator
Frazier wants to issue S9,000.000000
in new money to pay off holders of
farm MORTGAGES. Farmers then would
pay the Government ~ per cent
annually in interest and / p per cent
in principal on the debt.
But if farmers get this bounty
home owners in cities would be en-
titled to the same treatment. That
would add $4,000 100000 to the
volume of brand-new currency that
would be required. Few doubt that
the printing of $4,000 100000 in new
cause financial activity, but the ex-
pertS think it would also write an end
to the present dollar.
The silverites want a variety OF
things. In the plan of Representative
Dies of Texas, already passed by the
House and recommended for passage
in the Senate, the Federal Govern
ment would offer to pay 25 per cent
above the world price for silver If
the silver sellers would buy American
farm products 1t would be dump
ing bounty of that amount.
Huge Bounty.
Under this plan the bounty could
amount to $400000,000 year, and
at present prices that would mean a
huge quantity of silver would be ac-
quired to serve as the base for new
currency, which would be used to pay
for the farm products. Some modi-
f1cation of this plan stands a chance
of getting approval at the White
House.
(Copyrisht, 1934)