Evening star., 1934-01-29
HOUSES APPROVAL
SENDS MONEY BILL
TO WHITE HOUSE
Rainey Tells Lawmakers
Senate Amendments Are
Agreeable to President.
U. S. CURRENCY WAR
WITH BRITAIN SEEN
Officials Outline Plans for Use of
ts Two-Billion- Dollar Stab.l-
IKE ization Fund.
BY the Associated Press.

By the Associated Press.
Congressional action was completed
today on the administrations money
bill, leaving the signatures of Vice Pres
tdent Garner and President Roosevelt
all that was necessary to enact it into
law
1t required only a few minutes for
the House to vote concurrence in Sen
ate amendments to limit to three years
the life of the proposed $4,000 100000
stabilization fund and the time within
which the President might devalue the
gold content of the dollar by 40 to SO
per cent Unanimous consent was
given by the House to the changes
placed in the bill by the Senate last
week.
The President called me over the
telephone, Rainey told newspapernen,
land said the amendments were en-
tirely satisfactory"
President Roosevelt will receive the
measure tomorrow and is expected to
lose no time signing 1t.
Administration officials today care
fully outlined plans for throwing the
stabiGzation fund into gear, at the
same time seeing possibilities OF a stern
currency war with Great Britain.
Understanding Lacking.
It is stated authoritatively that the
Treasury has reached no understand
ing with London on the relative posi-
ton of the pound and dollar. In
other words. this Government will en-
ploy what Secretary Morgenthau terms
its 81, 900 900 900 of blue chips" indie
pendently of England's use of her
equally large equalization tund.
When asked the direct question OF
whether a currency struggle with
Great Britain is imminent. Morgen-
thau's frank reply was Il don't know
In other quarters, however, it was
indicated that while money conflict
stands as possibility. it is not looked
for Immediately President Roosevelt
is known to feel the tremendous United
States gold reserve and the size OF the
stabilization fund prepare this country
for anything.
Dollar Rise Reported.
Treasury officials, mindful that the
dollar strengthened materially abroad
while Congress debated the devaluation
bill-a s496 to the pound figure pre-
vailing over the week end as con-
trasted with the $50 level few
weeks ago-were ready to start using
the fund as soon as it is handed
them. The administration is believed
much to prefer the $50 figure.
Before iamming the SO to 60 per cent
dollar bill through late Saturday by a
66 to % count, the Senate put to
3 year time limtation on the activities
authorized, and voted the President
power, if he wants to use it, to issue
silver certificates against such OF the
metal as is purchased from domestic
producers.
Proclamation Expected.
Very shortly after he receives the bill,
the President is expected to issue
proclamation. Although no figure has
been disclosed, many believe he will
first order an immediate 40 per cent de-
valuation of the gold dollar. Also ne
would at once take title to the Federal
Reserve systems gold supply and set up
the stabilization fund with the pronts
arising from the devaluatlon.
By fixing so to go per cent bracket
on the dollars future fuctuatlons-that
is, reducing the 1922 grains of fine gold
behind each dollar by 40 to so per cent
the Treasury is assured minimum
profit on the dollar value OF the Ma
tion's gold of So 66666, 666.
That profit is on the basis of 60
per cent revaluation, the figure mol
Gated by the present Government goio
price. Dividing the legal mint golo
price of s20.67 by the Treasury price
of s34.45. gives an even 60 result.
At present Britains money objectives
and those of this country are not re-
rarded as necessarily opposed. The
United States wants to keep the dollar
cheap in foreign exchanges as an eX-
port stimulus. London, apparently, mas
thoughtfully studied its huge foreign
carital investments and decided inter-
est should be paid in costly pound.
Its equalization fund has been used ac-
cordingly.
Struggle for Trade.
But Britain, too, has large export
trade. Pending possible stabilization,
there is the struggle for world export
markets which may involve both ma
tions. Eventually, the two nations will
talk stabilization. but there has been
nothing to indicate these parleys Will
come in the immediate future
Many bankers and economists have
predicted that keeping the dollar down
might prove dl1ncult. IeneIaAy lney
have attributed the recent dollar
strength to a return of American capi-
tai. which fled abroad in past months
of uncertainty, and is now attracted
home by the measure of stability caused
by the 20 to SO per cent dollar devalua-
ton limits, imposed by the monetary
measure.
Some bankers estimate American
capital in Europe totals some S2,0OO,-
600 900, the equivalent in size of the
stabilization fund.
Should a substantial portion OF this
be drawn to the United States by an
advancing business. they say Secretary
Morgenthau and the fund may have
task approximating that of attempting
to hold a cork under water.