Evening star., 1934-01-16
c. 0.P. OPPOSITION
LOOMS ON DOLLAR
Federal Reserve Suggestion
U. S. Take Gold Is Re-
iA. veaIed by Black.
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Continued From First Page)
SYSTEMS gold should be referred to Con-
greSs for determination. I understand
that the proposed bill Is for this pur-
pose"
The proposed legislation would re-
place gold taken from the Reserve
banks by gold certificates.
No Objection to Silver.
Black continued:
THE security for the gold certificates
is maintained by the Treasury in gold
bullion. Federal Reserve notes under
the new bill, as under the old law, are
the obligations of the Reserve bank
issuing them and of the United States. "
In his testimony to the House COM
mittee, Vanderlip said he had mo seri-
GUS objection to adding silver to the
metallic base.
The total production of the world
can not increase faster than that OF
gold-about 3l2 per cent a year." he
testified.
"A more rapid increase in the metal
lie money base is desirable. 1t should
increase in relationship to the increase
in business.
"Symetallism would broaden the base
without laying us open to the possibil-
ity of receiving the silver stocks of the
whole world"
Secretary Morgenthau, when he goes
before the Senate Banking Committee
to explain President Roosevelt's plan
for impounding all outstanding none
tary gold and allowing flexible dollar
OF Ion
for $4,000 O0O,00O stabilization fund
to guide the Nations currency.
May Require Several Weeks.
Democratic leaders meanwhile mar
shalled their forces, sure of opposi-
ton from such stalwarts within their
ranks as Senator Glass, Democrat, of
Virginia
Thus started the congressional strug-
gle. Many on Capitol Hill believed
several weeks would be required for
final enactment of the necessary leg
islation due to the complexity of the
subject.
There was no pause in the determined
White House advance toward a de-
valued dollar The Treasury offered
to pay until further notice, $3445 an
| ounce for newly mined domestic gold, a
quotation 80 cents higher than that Of
fered by the Reconstruction Corpora
tion yesterday for the twenty-first and
last time.
Morgenthau said this price for an
| ounce of gold made the dollar worth
| only go cents, as compared with the
The same end would be achieved by
reducing the dollars present 1922
grain gold content 40 per cent to 1898
grains.
We'll run our own show" was Nor.
genthau's reply to reporters questions
on prospects for any immediate inter-
national stabilization.
But the busy Treasury Secretary
added when asked about the stabiliza- :
ton fund an instrument long employed
by England:
1--WE want as many blue chips as they
have"
S2,666,0 100000 Profit Seen.
1--WE figured we might need $2,000,-
100000" Morgenthau said when asked
why this figure was chosen. "It is about
the same as England's equalization
fund"
Treasury experts figured a 40 per cent
devaluation would mean a dollar profit
of S2,666 ,000,0 900 on an estimated
81 ooo. 100000 of capturable gold. Pres
ident Roosevelt asked that the stabiliza-
| tion fund be taken from this profit.
The New York Federal Reserve Bank
will act as the Treasury's agent in US
ing this fund, just as it took the r. F.
C.S place today and offered $3445 an
fnr haI1 Nf ha
| ury.
Morgenthau said the $666 900, 900 of
profit over and above the Stabilization
fund will go into the Treasury's general
| fund
I'VE don't plan at present to use this
profit to meet current expenditures, he
replied, when asked If portion of the
| profit would 60 toward recovery costs.
| I'VE still plan to borrow whatever we
President Roosevelt's budget estimate
on how much would have to be Dor.
| rowed between now and June 80 was
| 10000, ,000, ,000-$6 000. 900, 900 or new
money and $4,000, ,000, 900 for refunding
Nom -Committal on New Money.
"Will new currency be issued on the
| additional proflts?" Morgenthau wa
! asked.
st can't say"
"Does international stabilization seem
any nearer?"
I'D rather not comment on that
This is move to take care OF our own
dollar"
Morgenthau was of the opinion an
agreement with Great Britain and
France would be sufficient for interna-
tional stabilization.
He told questioners that abandon
ment of the gold standard by France
would affect this countrys money pro-
gram "since it would change gold
prices"
Meanwhile, the Federal Reserve
Board figured the total par value Of the
worlds monetary gold stock at $l2,-
101 900 900, of which the United States
holds $4,011 100000 and France $3,176,-
| 600 000-more than half between them.
viii Call Sprague Back.
; After listening to DR.. o. M. w.
Sprague tell of his fears that the
Roosevelt monetary program might
damage the Governments credit and
impede recovery, committee members
decided late yesterday to call the Hax-