U.S. NOTE ISSUE.

Auckland Star, Volume LX, Issue 288, 5 December 1929, Page 7

U.S. NOTE ISSUE.

Contemplated Expansion Rumour In Australia. " FANTASTIC REPORT." (Received 9.30 a.m.) WASHINGTON, December 4. Considerable surprise has been caused here by the circulation •of a report in Australia that the United States Federal Reserve Bank contemplated an expansion of its note issue in the interests of unemployment. It is pointed out that while the report shows cognisance of the sensational import of such a step, it lacks familiarity with the strncture or purposes of the Federal reserve system. The latter was instigated by ex-Presi-dent Woodrow Wilson for the purpose of controlling inflation. An examination of the Federal Reserve Act shows that the main body of notes can only be issued against commercial obligations. This would make it impossible for any arbitrary expansion.

Moreover, the information that unemployment to any extent necessitating such desperate financial remedies existed in the United States or -was at all impending, is received with incredulity. The reaction here was rather in the direction of not understanding the import of the Australian report. It is considered fantastic.

The Australian Press Association interviewed Mr. Young, Governor of the Federal Reserve Bank, who denied the truth of the note issue rumour. He said "it is a wild dream."