AMERICAN DOLLAR.

Ashburton Guardian, Volume 53, Issue 272, 29 August 1933, Page 8

AMERICAN DOLLAR.

MR ROOSEVELT’S PROBLEM ECONOMISTS AT VARIANCE WASHINGTON, August 15.

The next problem President Roosevelt will ihavfe to solve is whether to adopt a fixed' gold standard or a commodity or “rubber” dollar.

While a puzzled nation waits, a struggle is being waged within the Roosevelt councils.

One group of economists iii Air Roosevelt’s own Treasury Department is urging the President to declare for a fixed gold standard, and another group of the “Brain Trust” is pressing him toward the adoption of a commod--1 tiv or “rubber” doll at. The President is fairly open-minded on the whole question. He realises that the nation’s commerce abroad is at stake, and his sole purpose in .the meantime is to permit the American 'people to enjoy a stable existence and the purchase of the necessities and comforts of life.

Professor Irving Fisher, of Yale, leads the exponents of the “l’ubber” currency. He would have .the President exert the powers granted to him xindei® the Inflation Bill "to alter the value of the dollar evei’y month if necessai’y. Professor Fisher proposes that the dollar shall be given changing valuations in strict accordance with the changes noted in the prices of commodities. He has devised a commodity index weighted according to the economic importance of the commodities included in his calculations, the purpose being to achieve air average price, representing alt commodities. The professor argued to the President this week that the value of the Amei’ican dollar should be bounced up or down, so that it should always be level with the commodity index, and thus have a permanent degree of purchasing pow’er. This method of varying the value of the dollar would be to change the gold content of the dollar by executive decree.

At pi-esent the purchasing pow'er of the dollar is about 75 cents, compared with its value before the United States abandoned the gold standard. The President, under the authority given him by Congress, could formally declax’e the gold content of the dollar to be at any point down to 50 per cent, of its former gold value. Thus, according to Professor Fisher’s rule, if prices required a dollar worth 75 cents, 70 cents, or even 50 cents, the President would establish that value by executive oi'der, then change it from time to time as prices fluctuated.

The Treasury advisers of the /President, who are opposing the commodity index of the dollar,.have advanced the objection that fluctuations would make impossible any stabilised trade with foreign countries. Before shipments could be completed in foreign countries, the dollar would have jumped up or down in relationship to foreign moneys. If the point is made by the Fisher dollarities that an international commodity dollar may be adopted, the experts opposed to tinkering with money values retort that conditions in ail nations are never changing along the same courses, nor ever in the same degrees, so that the index of one nation might be up and that of another down. Another objection to the professor’s dollar is that speculators could obtain easy access tq figures which would inform them whether the commodity index was going up or down during the month, and they could demoralise foreign exchange by buying or selling dollars in money markets against future fluctuations to be ordered by the President.