The Waterbury Democrat., 1934-01-15


In conformity with the prog
ress we are making In restoring
a fairer price level and without
purpose of arriving eventually
at a less variable purchasing
power for the dollar, / ask the
congress for certain additional
legislation to improve our finan-
cial and monetary system. BY
making clear that we are estab-
fishing permanent metallic re-
serves in the possession and own
ership of the federal govern
ment, we can organize a cur
rency system which will be both
sound and adequate.
The issuance and control of
the medium of exchange which
we call money is a high pre-
rogative of government. 1t has
been such for many centuries.
Because they were scarce, be-
cause they could readily be sub
divided and transported, gold
and silver have been used either
for money or as basis. for
Ol IIlOhOy WAhCIl IilCAl-
selves had only nominal intrin-
sic value.
TOKENS AS MONEY
In pure theory, of courEe, a
government could issue mere
tokens to serve as money-tok-
ems which would be accepted at
their face value IL it were GER
tain that the amount of these
tokens were permanently limit
ed and confined to the total
amount necessary for the daily
cash needs of the community.
Because this assurance could
not always Or sufficiently be
given, governments have found
that reserves for basis of gold
and silver behind their paper or
token currency added stability
to their financial systems.
There is still much confusion
of thought which prevents a
world wide agreement creating
a uniform monetary policy.
Many advocate gold as the
sole basis of currency; others
advocate silver; still others adj
vocate both gold and silver
whether as separate basis, or on
a basis with fixed ratio, or on
a fused basis.
We hope that, despite pres
emit world confusion events are
leading to some future form of
general agreement. The recent
London agreement in regard to
silver was q step, though only
step, in this direction.
WORLD WIDE SOLUTION
At this time we can usefully
take further step, which we
hope will contribute to an ulti-
mate world wide solution.
Certain lessons seem clear
For example, the free circula-
ton of gold coins is unneces-
sary, leads to boarding, and
tends to q possible weakening
of national financial structures
in times of emergency. The
from one individual to another
or from the government to an
individual within a nation Is not
only unnecessary, but Is in every
way undesirable. The transfer
of gold in bulk is essential only
for the payment Of internationa
trade balances.
Therefore it is O. pruden'
step to vest in the government
of a nation the title to and pos.
session of all monetary golt
within It's boundaries and tt
keep that gold in the form Of
bullion rather than in coin.
Because the safe keeping Of
this monetary basis rests with
the government, we have al
ready called in the gold which
was in the possession of private
individuals or corporations
, There remains, however, a very
large weight of gold bullion and
coins which is still in the pos
session or control of federal re-
serve banks,
ASKS TITLE TO GOLD
Although under existing law
there Is authority, by executive
act, to take title to the gold In
the possession or control of the
reserve banks, this is step Of
such importance that I prefer
to ask the congress by specific
enactment to vest in the United
States government title to al
supplies of American-owneo
monetary gold, with provision
for the payment therefor In
gold certificates. These gold
certificates will be, as now, Sc
cured at all times dollar fol
dollar of such weight and fine
ness as may be established from
time to time.
Such legislation places the
right. title and ownership tc
our gold reserves in the govern
ment itself; 1t makes clear the
governments ownership of any
added dollar value of the coun'
try's stock of gold which would
result from any decrease of gold
content of the dollar which may
be made in the public interest
1t would also, of course, with
equal justice, cast upon the
government the loss Of such dol.
lar value If the public interes
in the future should require ar
increase in the amount of gold
designated as dollar.
The title of all gold being ir
the government, the total stocl
will serve as a permanent ant
fixed metallic reserve which will
change in amount only SO fal
as necessary for the settlement
of international balances or al
may be required by future
agreement among the nations o.
the world for redistribution O
the world stock of monetar,