BUDGET PROBLEM

Dominion, Volume 27, Issue 69, 14 December 1933, Page 9

BUDGET PROBLEM

Roosevelt’s Difficulties KEEN PUBLIC INTEREST Conference With Advisers EXPENDITURE ON RELIEF By Telegraph.—Press Assn.—Copyright (Received December 13, 7 p.m.) Washington, December 12. « Consideration of the Federal Budget for the fiscal year 1935 is attracting much attention in view of the reconvening of Congress in less than a month hence. President Roosevelt conferred with his fiscal advisers to-day, including Mr. Morgenthau, the Acting-Secretary the Treasury, and the Budget Director, Mr. Douglas. It is understood their chief concern is to bring' the so-called ordinary Budget into balance and at the same time keep extraordinary ex-' penditures—that is, emergency relief expenditures—within reason. It is understood thfft Mr. Douglas wishes to keep the ordinary Budget within 2600 million dollars, with anticipated revenues of about 3500 million, hoping the excess will adequately provide interest charges on the public debt, Including the additional borrowing necessary for works, crop loans, etc. It is universally recognised that the success or failure of such aims will be an important ,factor in the Inflation controversy, as failure to maintain the Government’s'credit will be regarded as a sure path to inflation. GOLD RESOURCES Sufficient to Cover New Note Issue FEDERAL RESERVE REPORT (Received December 13,11.40 p.m.) Washington, December 13. While the inflation debate continues to absorb statesmen and economists, the United States Federal Reserve Bank figtires disclosed on Tuesday that the system had sufficient gold resources to increase the currency in circulation by more than 50 per cent, without resorting to any inflationary measure. It was described as ready to do this as rapidly as a new note issue could be pushed into the channels of industry and commerce. The difficulty Is that the outlets are clogged. Loans by member banks are shown to be continuing at a low level, with consequent small demands by the latter upon the Federal reserve banks for cash. Member bank deposits were high. By utilising all Its eligible resources the Federal Reserve Bank figures showed it’could issue nearly three billion dollars in new Federal Reserve notes, every dollar of which would have a gold backing above the 40 per cent, required by-law, EXCHANGE MARKETS Treasury Officials Puzzled Washington, December 12. The gold price is unchanged, and is 1 dollar 76 cents above London price on the basis of sterling, which opened at 5 dollars 10 J cents to the £l. The persistence with which the American Treasury figure is being made available in London before it is published here continues to puzzle the authorities. Reports of stabilisation conferences between Britain, France, and the United States are denied by the Treasury. The dollar rose in value against foreign exchanges to-day, against the franc and sterling, which both fell. Commodities fell in price and stocks and bonds were irregular. CONTROLLED PROFIT “Proper Reward , of Individual Industry” Chicago, December 12. The controlled profit system “as the proper reward of individual Initiative, industfy,- and thrift” must be maintained if the Government’s recovery programme is to succeed, Mr. Peek told the American Farm Bureau Federation to-day. He' said: ‘‘The great apprehension In the minds of many business men about the relations of the Government to business” is unwarranted, because “the Government has more hay down* now than it will get up before it rains. I believe that under any system of government individual effort must be encouraged and the property, rights of the Individual protected.” TRADE BARRIERS Appeal to Pan-American Nations MOVE TO LOWER TARIFFS (Received December 13, 7 p.m.). Montevideo, December 12. The United States asked the PanAmerican nations to-day to reduce their tariffs and trade barriers “from the present great heights to moderate and reasonable levels” by the immediate adoption of a policy of bi-lateral reciprocity and commercial treaties. The Secretary of State, Mr. Cordell Hull, made a recommendation before the special Economic Committee of the Pan-American Conference urging an understanding with other important nations to proceed simultaneously in the lowering of such trade barriers “to a level dictated by a moderate tariff policy.” DRINKING HABITS Influence of Prohibition (Received December 13, 9.55 p.m.) ’ Chicago, December 12. The “Sun” correspondent says that although the nation. ia partaking, in

the repeal of prohibition in no uncertain manner, the managers of the great hotels find a notable change from the old habits. The revived bars are not patronised in the old-time way. Moneyed visitors have learned to drink privately in their rooms during the prohibition era, and are continuing that custom. Fourteen years of sneak drinking in the bathroom of hip liquor have left their mark on the nation, and it is a question whether this generation of Americans can ever come to drink naturally.