Nogales international., 1934-01-27
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cents gold reserves. There is now
outstanding .omewhat less than
half of that amount Of currency.
The net effect of this move, then
will be to increase the Govern
ment's ability to issue money by
more than six billion dollars, every
dollar of it backed by forty per-
cent gold.
Except for the provision author
izlng the Treasury to deal in for
eign exchange, with a 100000 900
fund to operate with, as a means
of maintaining parity between our
money and that of other nations,
the rest of the Presidents money
program is frankly dependent upon
international conditions. He would
like to take the next step in the
demonstration of silver, but is
waiting for other nations besides our
own to carry out their part OF the
London agreement under which 66
nations promised action early this
wear to increase the price OF silver
in relation to gold. What the Pre-
sident had to say on silver is worth
quoting, however:
'The other principal precious met
| al-silver-has also been used from
time immemorial as metallic base
for currenc:es as well as for actual
currency itself. 1t is used as such
by probably half of the population
of the world. 1t constitutes a very
| important part of our own none
tary structure. It is such a crucial
factor in much of the worlds in
ternational trade that it cannot be
neglected.
Governments can we'll, as they
have in the past, employ silver as
basis for currency, and I look for
greatly increased use. am, how
ever, withholding any recommended
ton to the Congress looking to
further extension of the monetary
use of silver because [ believe that
we should gain more knowledge Of
the results Of the London agree
ment and of our other monetary
measures"
/ The reconciliation of silver Is
regarded by many of the President S
advisers rs the most important fac
tor in the restoration Of world pric-
es.
i Serving Notice
! The hope of the Administration
is, however, that the definite fix
ing of a top price for gold, serving
notice on all the world that the
dollar is now worth no more than
sixty percent of its former value,
will go long w;lJ toward removing
uncertainties which have kept priv
ate capital in hiding. Every holder
og gold securities now knows that
he cannot ge3 more than 60 per-
cent of their former gold value for
them. Every creditor knows that
dollars he is gong to collect from
his debtors will be worth only six
tenths of what they were if the
standard of measurement be gold
But the Administrations view is
that a dollar will remain dollar
so long as it is backed by the cred
1t of the Government, and that that
credit has not been impaired, nor
is it likely to be impaired so long
as the immense gold re>erve be-
hind the currency is maintained.
Whether or not this latest none
tary move will have the effect OF
raising domestic prices is another
question, yet to be answered. 1t
may or it may not. 1t may turn
out. as many of his advisers have
told the President, that nothing
which the United States can do by
itself will raise prices SO long as
the world price of our eXportable
srrpluses remains low, and that
world price can only be raj ed by
international action.