Evening star., 1934-08-11
Policy Would Permit More
Than 81, 900, 900, 900 In
crease In Certificates.
OBSERVERS SPECULATE
ON FUTURE POLICY
Plan Expected to Answer Critics
Who Claim U. S. Needs
More Money.
BY the Associated Press.

A decision to issue currency TO the
full extent permitted by the law
against certain silver in the Treasury
prompted speculation today whether
similar policy would be applied to
future purchases-which might pump
more than a billion dollars Of new
money into circulation.
The TreaSury's surprise announce
ment last night, a SHARP change of
policy, applied to a comparatively
insignificant amount OF silver held In
the Treasury when the new silver
purchase law was enacted. It's i'm
portance was in pointing to the pos
sible future course on the huge silver
purchases authorized by that law.
Observers raised their eyebrows at
three words In the Treasury announce
the more expansive policy would not
that recently included naturalization
Of the Nations bullion stocks
Circulation Drops.
Disclosure Of the Treasury's silver
plan conceded with the release of
figures by the controller Of the cur
rency showing that the money In
circulation per capita had dropped
from $42.46 to $41.99 during July.
These compare with a per capita cir
culation of $44.76 on July 81, 1898.
and of $53.21 for October 81, 1920.
Total circulation Of silver certificates
amounted TO s494, ,732, ,S0l, OF which
SOS, ,752,5I5 was held by the Federal
Reserve banks.
The total amount Of money in cir
culation July 81 was S5,317. Ass. $40, as
compared with $5,373,4ee,752 on
June 80.
The relatively minor circulation
position of silver was shown by a per
capita figure of S3.15, as compared TO
S24.05 Of Federal Reserve notes and
Of $500 of national bank notes.
Answer No Money" Plea.
OficialS have indicated privately
more than once they did not expect
the issuance of new silver currency to
result In much Of circulation in
crease. as it was believed they would
In many cases merely sllpplant out
standing Federal Reserve notes.
They have left no doubt. however.
that they would exert every effort to
put the new currency into circulation
as an answer to the demands of silver
proponents and infiationists who have
repeatedly asserted the country needs
more money"
To this end. payment of the newly
printed certificates is being made
at the treasurers Office In preference
to other forms of money, and Federal
Reserve banks have been requested
also to put the new certificates out
ahead of other currency when such
certificates are received from the
Treasury.
The TreaSury's announcement dis
closed that approximately $50 o.o0o.-
900 Of currency was being printed
against 100000 ounces Of silver
previously carried at a cost of $4o,-
900. 900.
The Treasury has q long way to 20
in its program carrying out the man
date Of Congress to bring the silver
backing Of the currency up to one
to-three ratio with gold, purchase Of
more than billion ounces being esti-
mated privately as necessary.
The difference between the cost of
this and $129 an ounce, will be con-
sidered Treasury profit and the
amount of imitation will depend upon
whether it is used to back silver
money.
Profit Dormant.
The difference between the cost and
the $l.29 price will be carried on the
books as "seigniorage," or the Treas
ry's profit.
Just what the Governments policy
will be toward possible spending of
the Treasury profit" and thus get
ting the additional money into cir
culation remained to be seen.
Senator Thomas, Democrat, of
Oklahoma, has estimated that the
Government would have TO acquire a
billion more ounces Of silver to effec-
tuate the policy of making silver one
fourth Of the monetary base. II the
policy is carried to a conclusion, q
possibility which some have doubted,
the Government could issue 81 ,29o,-
000,00O in certificates.
Almost Triples Supply.
Opinion Of observers was that ma
tionalization thus meant more than
~ times as many certificates as pre-
viously expected, but 1t was stated
that they would not all go out into
circulation.
Thomas has denied any imitation"
is involved in the naturalization
move, pointing cut that silver will
be in the Treasury to back the paper
money.
the paper is also being issued against
all free silver In the Treasury before
the silver purchase act.
This the announcement said,
amounted to approximately 62,000,-
600 ounces, the cost of which was
about s46 100000. These silver Ger
tificates are being issued on a basis
of Sl.29 an ounce, because that Is
required by law for all silver certifi-
Gates. The total amount to be issued,
under the Presidents order, against
these $1,000 900 ounces win be Of a
face amount of approximately $780,
900 900. The difference between the
cost Of the silver involved and this
face amount constitutes seigniorage
under the law and as these certificates
are issued that difference win be
shown on the daily statement as
such"
President Roosevelt has said he be-
lieves an international monetary con-
ference on both gold and silver would
help the nations of the world.
his Secretary OF the Treas
ury reported yesterday any progress
.(Coptinued on Page 5. Column 81