STABLE DOLLAR.

Auckland Star, Volume LXIV, Issue 296, 15 December 1933, Page 7

STABLE DOLLAR.

LEVEL IN QUESTION.

U.S. Opposition to Anything

Over 50 Cents.

INFLATION THREAT.

(United P.A.—Electric Telegraph—Copyright)

(Received 2 p.m.)

"WASHINGTON, December 14.

Senator E. Thomas (Democrat, Oklahoma) stated yesterday that he been informed that the New York Federal Reserve Bank was negotiating with the Banks of England and Fi-anee for the immediate stabilisation of the dollar at about 62 cents.

The senator immedrately issued a statement denouncing plans to stabilise at any figure above 50 cents. He threatened a fight for inflation in Congress if President Roosevelt did so.

Stabilisation at a higher figure would produce a terrible situation. It would probably result in the collapse of the President's recovery programme.

Senator Thomas predicted that various elements of-the inflation group would prove to have a majority in Congress, but probably not sufficient to override the Presidential veto.

Official Denial. Mr. H. Morgenthau, jun., again denied reports of negotiations for currency stabilisation agreements between Britain, France and the United States.

Senator Thomas, commenting on the unchanged price of gold, said: "The longer that goes on the more stable will the dollar become. It sort of confirms more and more the impression that the President thinks it is about where it should be stabilised."

The Speaker of the House of Representatives, Mr. Rainey,' said that if President Roosevelt proposed the free coinage of silver, "it would go through the House like it was greased." He advocated that a 20-to-l ratio with gold "would be a method of avoiding inflation."

It was disclosed by Mr. Jones, of the Reconstruction Finance Corporation, today that Professor, Warmer, agricultural economist of Cornell University, and avowedly Mr. Roosevelt's closest financial adviser, fixes each day's gold price. Mr. Jones said that he knew nothing of the formula.

The dollar experienced a sharp decline to-day on the foreign exchange markets. The franc rose to 6.13 cents and the dollar dropped to 63.80 in gold, as against the franc. Sterling- rose to 5.11.

Stocks rose little in response to the falling dollar, but commodities were slow to follow. Government bonds were heavy. The decline of the gold value of the dollar was held by .Wall Street to be due to Senator Thomas' inflationary talk.