Evening star., 1934-02-01
j. s. ON 1884 MODEL
BULLION STANDARD!
Morgenthau Describes Sys-
tenn as Fisher Sees End
of Federal Reserve.

Continued From First Page.)
gold export point that is when the
dollar fell too low in terms of foreign
gold standard currencies. Such sales
would be at the S35 prices.
The bill before the House Commit
tee for establishment of the monetary
authority, Prof. Fisher held to be "a
splendid step toward the goal which
President Roosevelt has set before us.
For political reasons he asserted,
the Federal Reserve System, with II
regional instead of one central bank,
was established in 1913.
only loose and ineffective co-ordi-
nation was attempted through the Fed
eral Reserve Board he continued.
1.-THE result has been chaos and internal
dissension.
"Dissension and vacillation will con-
tinue to have deadly effects as long as
the tPederal Reserve) system continues
to lack system. 1t has been tried and
found wanting. 1t will now be lucky
If it escapes destruction altogether or
absorption by the Government.
The pending proposal for monetary
authority, he said. seems to be the
best available compromise permitting
the system to survive intact so long as
the management of the dollar is put In
new hands
Morgenthau Answers Questions.
In his first press conference since
President Roosevelt's devaluation proc
lamation, Morgenthau answered num-
ber of questions about the new money
situation
He declined to say, however. whether
gold purchases made to the Treasury
by the New York Reserve Bank would
be paid for out of the fund
Asked whether abandonment of the
gold standard by France would mean
world embargo on gold shipments.
Morgenthau's only reply was that such
developments would be taken under
advisement.
Testifying to the House Committee,
Prof. Fisher contended permanent
monetary authority would be far su-
perior to permanently veSting the
control of the dollar in the hands of
the President or the Secretary Of the
Treasury"
This is said not because of any lack
of confidence in either of the present
incumbents Of these Offices he ex-
planned.
"On the contrary. they are better
fitted than any other existing officials
for this great function and I rejoice
that the bill which became law yester-
day temporarily conferred on them and
no one else some of the powers needed
for such control.
But we need to build for the long
run and We cannot expect that all
future Presidents and Secretaries of the
Treasury will be as fitted for such a
special function as are President Roose-
welt and Secretary Morgenthau.'
War With Bankers "Conceivable."
Fisher held. too. that 1T is conceiv-
able. even in the immediate future. that
the bankers and the President should
wage war"
If the bankers should attempt to
dump the securities they hold, it would
be difficult for the President to coun-
teract the def1ationary influence of
such action he asserted.
The monetary authority, he con-
tended would have the requisite con-
trolls to use in such an emergency.
At the Treasury press conference
Morgenthau meanwhile said the ad
visers in guiding the dollar would be
. flexible, shifting group
Advice of different experts will be
sought from time to time. he pointing
out that Yesterdays White House con-
ference included himself. Gov. Eugene
Black of the Federal Reserve Board
Gov George l.. Harrison of the New
York Reserve Bank. Prof. Warren and
James H. Rogers and Herman Oil
phant. the TreaSurys general counsel
Morgethau was unable to give any
exact estimates of the flight of capital
back to this country or how much
profit might be made by those who
purchased gold standard currencies
prior to devaluation.
Wants World to Benefit.
In other administration quarters it
was said that in its monetary actions
the United States wanted the whole
world to go along and share in any
recovery which might develop 1t was
emphasized there was no bitterness
against any nation and that money
policies would be directed with the
desire of aiding the whole world
Meanwhile the United States gold
supply was announced at the Treasury
today to comprise S4029 o92 1886 on
the old dollar basis.
This was the value of the Nations
monetary gold to which the Govern
ment took title on Tuesday. but does
not represent the increased dollar value
resulting from President Roosevelt's re-
valuation of the dollar.
The revaluation would increase the
dollar value Of this gold to about So
100000, 900, with the profit of the diff
ference going to the Government.
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