"GOLD WAR."

Auckland Star, Volume LXV, Issue 2, 3 January 1934, Page 7

"GOLD WAR."

FIERCE U.S.A. FIGHT. NEW BANKING SYSTEM. Roosevelt's Supporter Indicates Policy. GOVERNMENT CREDIT CONTROL (United P.A.-Electric Telegraph—Copyright) (Received 12 noon.) NEW YORK, January 2. The "Evening Post," whose proprietor, Mr. David Stern, is one of President Roosevelt's strongest journalistic supporters, opened the tight to-day for what would virtually be a Governmentally-controlled central bank to supersede the Federal Reserve system with its 12 regional banks. In a front page leader the "Post" declares that the Government must control dollar value credit machinery for the good of the entire people. This is impossible with 12 separate organisations nominated by the large commercial banks in their respective districts wishing to manipulate credit for their own good.

In a dispatch from Washington the "Tost" declares that a fierce epocal "gold war" is impending, also that the Treasury is prepared to demand that gold to the value of 3,000,000,000 dollars, which is held in Federal Reserve vaults be turned over to the Treasury for a 100 per cent revaluation with the accrued profits going to the Government. Opposed to such procedure, the dispatch adds, the Federal Reserve Bank system is mustering banking and insurance fraternities to fight bitterly for the Federal Reserve's status of autonomy. The newspaper also quotes Dr. Luther Harr, Professor of Finance at the University of Pennsylvania, as stating that credit inflation to return to 1926 price levels can only be accomplished through the supervision of credit by the Government. "One of two steps will be necessary to give the Government control of the dollar," the professor said. "One is to create a new central bank owned by the Government, and the other is to give the Government control of the volume of credit issued by the Unified Federal Reserve Banking system."

TREASURY CHIEF. Woodin Appointed. SUPPORT FOR GOLD BUYING. WASHINGTON, January 2. President Roosevelt yesterday announced that Mr. William Woodin had offered his resignation as Secretary of the Treasury owing to continued illhealth. Shortly afterwards Mr. Henry Morgenthau, jun., who has been actingSecretary since the autumn, took the oath of office as Secretary. The ceremony took place in the oval room in White House. Only the members of the Roosevelt and Morgenthau families were present. Mr. Woodin's resignation was sent from Tucson, Arizona, where he is being treated for throat trouble, which became chronic through overwork in the Treasury Department in the early days of the present Government.

The elevation of Mr. Morgenthau to this important post is regarded as a victory for the. inflationists. He is one of the leading members of the "brain trust," and a supporter of the goldbuying policy of the President.