The Waterbury Democrat., 1934-01-15

this permanent policy. placing
all monetary gold in the owner
ship of the government as a
lar. Because of world uncertain
bullion base for its currency,
the time has come for a more
certain determination of the
gold value of the American dol
tiles. 1 do not believe 1t desir-
able in the public interest that
an exact value be now fixed.
The president is authorized by
present legislation to fix tho
lower limit of permissible re-
valuation at so per cent. Careful
study leads me to believe that
any revaluation at more than
go per cent of the present
statutory value would not be in
the public interest. therefore,
recommend to the congress
that it fix the upper limit of
permissible revaluation at 60
per cent.
That we may be further pre-
pared to bring some greater de-
gree of stability to foreign ex-
change rates in the interests OF
our people, there should be add
ed to the present power, of the
secretary of the treasury to buy
and sell gold at home and
abroad, express power to deal
in foreign exchange as such. AS
a part of this power, l suggest
that. out of the profits of any
deyaluation, there should be set
,lp a fund of two billion dollars
for such purchases and sales of
gold, foreign exchange, and gov
eminent securities as the regu-
lation of the currency, the
maintenance Of the credit of the
government and the general
welfare of the United States
may require.
Certain amendments of exist
ing legislation relating to the
convenience of handling current
problems in this field. The Sec
eretary of the treasury Is pre-
pared to submit information
concerning such changes to the
appropriate committee of the
congress.
RELATE CHIEFLY III
GOLD
The foregoing recommends
tons relate chiefly to gold. The
other principal previous metal
silver-has also been used from
time immemorial as a metallic
base for currencies as well as
for actual currency itself. 1t 10
used as such by probably half
the population of the world. 1t
constitutes a very important
part of our own monetary struc-
ture. 1t is such crucial factor
in much of the worlds interna-
tional trade that it cannot be
neglected.
On December 81, 1888. is
sued proclamation providing
for the coinage of our newly
mined silver and for increasing
our reserves of silver bullion,
thereby putting us among the
first nations to carry out the sill
yer agreement, entered into by
sixty-six governments at the
London conference. This agree
ment is distinctly q step in the
right direction and we are pro-
ceeding to perform our part or
1t.
All Of the sixty-six nations
agreed to refrain from melting
or debasing their silver coins, to
replace paper currency of small
denominations with silver coins
and to refrain from legislation
that would depreciate the value
of silver in the world markets.
NATIONS AGREED ON
Those nations producing large
quantities of silver agreed to
take specified amounts from
their domestic production and
those holding and using large
quantities agreed to restrict the
amount they would sell during
the four years covered by the
agreement.
If all these undertakings are
carried out by the governments
concerned, there will be
marked increase in the use and
value of silver.
Governments can well, as they
have in the past, employ silver
as q basis for currency, and l
look for a greatly increased use.
I am, however, Withholding any
recommendation to the congress
looking to further extension of
the monetary use of silver be-
cause / believe that We should
1,~Axutadon nf tho n
suits of the London agreement
and of our other monetary
measures.
Permit me once more to stress
two principles. Our national cur
rency must be maintained as a
sound currency which, insofar as
possible, will have fairly con-
slant standard of purchasing
power and be adequate for the
purposes of daily use and the
establishment of credit.
The other principle is the in
herent right of government to
issue, currency and to be the
sole custodian and owner OF the
base or reserve of precious me-
tails underlying that currency.
With this goes the prerogative
of government to determine
from time to time the extent
and nature of the metallic re-
serve. / am confident that the
nation will well realize the def
mite purpose of the government
to maintain the credit of that
government and, at the same
time, to provide a sound med
ium of exchange. which will
serve the needs of our people.