Evening star., 1940-01-09
Chase Board Chief
Urges u. 5. Return
To Free Gold
Action to Preserve
Monetary Character
Of Metal Asked
BY the Associated Press.

BY the Associated Press.
NEW YORK, Jan. 9.-Winthrop
w. Aldrich, chairman of Chase Ma
tional Bank, recommended today the
return of gold to free circulation in
the United States.
I'VE are already" he told the
banks shareholders at their annual
meeting, "the possessors of so per
cent of the worlds monetary gold
stock. Before peace can be achieved
this share may have riSed farther.
In large sense we are and will
be the conservators OF the worlds
monetary system.
1T is for this reason, as we'll as
for ample reasons of our own, that
we must take action now to pre-
serve the monetary character of
gold AS I see it, our immediate
function is to re-establish a free
gold market permitting free move
ment of gold bars and gold cur
rency both inward and outward so
that the price of gold as here es-
tablished shall constitute firm and
certain base line from which the
values of the diverse currencies OF
the world con be confidently fig
ured."
Outlet Hard to Find.
Mr.. Aldrich asserted that, with
more than 5000, 900, 900 of excess re-
serves, the Nations banks were
hard pressed to loan out their
money.
Much the same opinion was ex-
pressed in the annual report of
James H. Perkins, chairman of the
National City Bank, as he told that
institutions shareholders of net
earnings for 1889 of S17,642, 1859
compared with $10,547750 in 1888.
The excess of our cash reserves
above legal requirements, reported
Perkins, has been greater than
we have ever before carried. This
reflects large gold imports and the
continued lack of demand for loans
on a scale commensurate with our
resources.
We are continuing to make
vigorous efforts to lend our money
to acceptable borrowers. An in
crease in serial loans and in the
aggregate of our personal loans and
consumer credit financing has, how
ever, barely offset the decline in
other loans"
Describing the acquisition of
SIT 100000 of gold in United
States 'storehouses, Aldrich said:
In the superficial view, the lodg-
ing with us OF so great a share OF
the worlds monetary gold stock Is
evidence at once of our economic
strength and of our detachment
from the struggles now convulsing
other nations.
Danger Is Stressed.
But this complacenU attitude
takes no account of what this flood
OF gold may do to us, and. for that
matter, what 1t may do to the whole
economic world, if we mishandle
it. -.
This influx of gold into the
United States is far from an un-
mixed blessing.
1t enlargeS the deposits of the
banks OF this country beyond their
present power TO make use of them.
With excess reserves al the
i've billion marx, simple process
OF figuring shows what could hap
pen on the basis of expansion pos
SlollltleS as they exist.
If these excess reserves should
progressively pass into the form OF
loans and so, IN turn, into the form
OF Danh deposits, tney coulu produce
an expansion OF bank crealU oy sl5,-
600 900, 900 to $4,000 900 ,0OU without
bringing into play the further ex-
panSlon capacities inherent in the
Federal Reserve System. No one
can DOUBT that such a growth OF
bank credit would lead once more
into violent expanslonary process,
with It's familiar accompaniment OF
speculation, a rising cost OF living,
and IN the end, de1atlon. = s =
The wise course seems TO me to
be the following: We should remove
as promptly as possible the present
proniblLlons ana restrictions on the
private possession OF gold. We should
resume specie payments, coming gold
again and putting gold COINS back
into circulation.
"At the same time, gold certificates
should be reinstated for the con-
venience Of those who do not wish
TO use or hold sizable amounts of
gold coin. New imports of gold
should be paid for in gold coin or
negotiable gold certificates and the
circulation of gold and gold GER
tificates should be encouraged"