Evening star., 1934-02-01
The Newest Dollar.

The dollar you have in your pocket
today does not differ greatly from the
dollar you had in your pocket yester-
day afternoon at nine minutes past
three O'Clock, which was just one min
ute before the President, exercising ex-
raordinary powers conferred on him by
Congress, changed its weight in gold
from Is 8 10 grains to IS 5 81 grains
nine -tenths fine.
This is because your dollar has al
ready undergone a rather gradual de
facto depreciation in terms of gold, and
the new. official definition of its weight
or value, in gold. is approximately the
same that gradual depreciation had
given It.
Nor will it require approximately two
dollars today to purchase what one
dollar would buy before this gradual
process of depreciation in terms OF gold
began. The new American dollar has
about the same purchasing power today
that the dollar had yesterday, though,
officially, its value in gold has been re-
duced by nearly half.
What, then, is the purpose of dollar
devaluation?
The President was given authority by
Congress to devalue the dollar for any
or all of four reasons: Cd when he
found the foreign commerce of the
United States to be adversely affected
by depreciation of foreign currencies;
late and maintain the parity of currency
issues Of the United States: 90 when
an economic emergency required the
expansion of credit. and 90 when an
expansion of credit was necessary to
secure by international agreement q
sterilization at proper levels of the
currency of various governments.
In his proclamation yesterday the
President cited the facts that investi-
cation had shown the foreign commerce
OF the United States to be adversely
affected by depreciation of foreign cur
rencies in relation to the present stand
ard value Of gold; that an economic
emergency requires an expansion OF
credit, and that "in order to stabilize
foreign commerce against the adverse
effect Of deprecated foreign currencies"
It Is necessary to fix the new weight in
gold of the dollar
70,
President on January Is had asked
Congress for legislation that would vest
ownership of the gold reserves Of the
United States with the Treasury, and
this step was considered by the Presi-
dent as being lin conformity with the
progress we are making in restoring
fairer price level and with our purpose
Of arriving eventually at a less vari-
able purchasing power for the dollar"
The time has come, said the President,
"for q more certain determination OF
the gold value of the American dollar"
But, the President Immediately added
public interest that an exact value
he now fixed
An exact value of the American dol
lar was fixed in the Presidents procla-
nation yesterday. But that exact
value" will remain only SO long as the
President in his discretion desires 1t
to remain. This proclamation shall
remain in force and effect until and
unless repealed or modified by act of
Congress or by subsequent proclama-
tion; and notice is hereby given that
I reserve the right to alter or
modify this proclamation as the inter-
est of the United States may seem
TO require"
The new" American dollar in your
pocket today, in other words, may not
accumulate much age before it is re-
placed by another new" American
dollar, depending upon how the ex-
pertinent of manipulating price levels,
Of increasing credit and of taking So
called protective steps against the de-
preciated foreign currencies of other
nations works out Only one thing
about the new dollar is certain, and
that is that it represents an entirely
new monetary policy of the country;
that the application of this policy is
IN the hands of the President, and that
It is now to undergo the test which
will determine It's success or failure
0 test which heretofore has not been
made.