Evening star., 1934-01-14
Impounding Gold.

President ROosevelt's authority under
existing law to impound into the Treas
ury of the United States all the gold
In the country, including the gold held
In the Federal Reserve Banks. has been
upheld by ruling of the Attorney
General. Whether the President will
impound all the gold remains still to be
determined. It seems clear, however.
that the Attorney General would
scarcely be called upon to render an
opinion on this matter If it were not
under actual consideration by the Chief
Executive.
Such a step might be preparatory to
Q further devaluation Of the dollar and
an effort at its stabilization. possibly
through a cut in the gold content OF
the dollar. A cut of that character has
been advocated in several quarters. It
Is a course which was authorized IN
the so-called Thomas initiation amend
n1ent to the farm mortgage act passed
at the special session Of Congress last
Spring. It seems clear that in the
event of the cut in the gold content
Of the dollar. those who hold gold
would Immediately benefit thereby in
terms of dollars. If this increment in
wealth, measured in the terms OF dol
lars, is to be brought about. it is con-
tended that the benefit should go, not
to the banks or to private individuals,
but to the Government And if the
Government is to benefit thereby 1t
might be in a position to pay of bill
lions of dollars of its public debt with
out . further move.
Here would be a measure of imitation
controlled imitation, 1t is contended-
that might have far-reaching effect.
going beyond the increase in the
Treasury holdings and the ability of
the Government to double its debt pay
ments. It is not a measure that would
appeal strongly to those who possess
gold or have an ownership of gold. The
administration demand months ago
that all gold and gold certificates out
standing and in the hands of individ-
ualS be turned in was perhaps the first
step in this plan, although the insist
encc Of the Government that gold be
turned in at that time was termed a
movement against hoarders and hoard
ing.
Impounding the gold is called nee
essary step before the stabilization Of
the dollar and the issuance Of new cur
rency against the enhanced value Of
the gold which is expected to result
from the proposed higher statutory
price In dollars for the metal
The President, it has been said. con-
templates sending a message to Con-
gress dealing with this subject, and
perhaps asking for further authority to
carry forward q broad monetary policy.
It Is clear. however, that If another
measure Is thrown into the congress
sional hopper dealing with currency
matters tremendous effort will be made
by friends of free silver, for example
VI oOlIlC OtllC1 hulu VI ulU1lCtoAy AA3lo-
tion to have their theories carried in
the new law. The administration
would have to exert all its influence to
hold the lines, and if such fight can
be avoided and the President goes for
ward with his program, there may be
40 call for new legislation.
The sterilization Of the dollar may
likewise be sought in some multilateral
or bilateral international agreement.
It seems obvious that sterilization of
currency would be more effective If an
international arrangement could be
perfected. The President in his an
nual message to Congress recently said
that the other nations seemed not to
be ready for such stabilization. It has
been said that the President is develop
ing, however, long-range plan for
stabilization Of the monetary system,
and In that event it may take time to
work out the details and to put them
into effect. Sterilization is desired,
particularly in view of the great financ-
ing and refinancing of Government Sc
curities that must take place, and in
the interest Of all private business.