The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-04-02
INITIATION AGAIN BEING
SUGGESTED.

Talk of initiation is again heard IN
Congress. The governments bills are
piling up-vast numbers of dollars must
be found to pay for the veterans bonus,
for the retirement of matured federal
bonds, for the new farm program.
Treasury experts are obviously dubious
of the wisdom of issuing new bonds,
and Congress itself, facing an election
wear. in which all Representatives and
a third of the Senators must again come
before the electorate for approval or re-
lection. are extremely chary OF passing
new taxes or increasing old ones.
so" say many congressman In Ell
feet, why don't we simply speed up the
presses in the Bureau of Printing and
Engraving and produce new currency 10
meet our needs?" In support OF this,
they produce the fact that the gold now
held by the Treasury has value OF
$1Ol82 100000, while the amount OF
currency in circulation totals but little
more than half Of that-$5,7 100 yOOO, 900.
In a recent feature article, entitled
The New Gold Rush." the United
States News summarizes the initiation
problem, and shows why the gold sur
plus" is not what it appears on the
surface. A brief of the News findings
follows:
OF the SlOOOO,OOO,OOO worth of gold
stored by the Treasury, the Federal Re-
serve Banks hold gold certificates worth
$3.50. 100000. These certificates are
nothing more or less than warehouse
receipts. The treasury keeps the gold
the banks possess what amounts to
contract for its use. The certltlcateS
serve as backing for the S3,666OOO,O OC
worth of Federal Reserve Notes Whlct
we all use in carrying on bushes!
transactions. They also serve as back
ing for other notes valued at LITTLE
more than $250O00,000.
Further, their part of the Treasury!
gold is backing for all the bank de-
posits of the nation-totaling some S45,
900 900, OOO-which are the source ant
mainstay of credit. Thus, the gold GER
tificates held by the Federal Reserve
constitute a trust fund, shared in b!
all the country's bank depositors, Wht
were forced to turn in their own golt
and gold certificates in 1888.
After the gold backing of the golt
certificates is taken out, the Treasur.
has about S2,25O,OOO,OOO worth of tn
yellow metal left in stock. But ever
this portion of the total gold hoard i
not free" One billion eight hundred
millions of it is in the sterilization
fund, which is used to protect the dolla
in currency wars.
The remainder, of about $3.50, O0O,O DOC
is included in the Treasury's genera
fund. If new money were lSsuet
against this half billion, the Treasury
cash balance would be proportionatel
reduced, and nothing could be gained.
So, concludes the News, in which l
agrees with recent statements of Treas
ury officials, there is no available golt
against which new currency may b.
issued. If such new currency is ordered
by CongreSS-over an almost inevitably
Presidential veto-it will be necessary II
confiScate partially or wholly the golt
held in trust for bank depositors. Ant
it is a certainty that any inflationar.
program will meet with terrific opposi
ton not only from those in high place
in industry and government, but iron
millions of ordinary citizens" as well.