RIGHT OFF GOLD

Evening Post, Volume CXV, Issue 124, 29 May 1933, Page 6

RIGHT OFF GOLD

It is now nearly three months since Mk Roosevelt was sworn in as President of the United States in circumstances probably as gloomy; not to say desperate, as any ruler ever had to face in time of peace. The main reason why the outlook for his country is so much brighter today is that he refused to despair and succeeded in inspiring his countrymen with a large share of his own hope and courage. It has been a personal triumph just as conspicuously as the reconstruction of Italy was a personal triumph for Signor Mussolini or the "harmonising" of Germany by terrorism for^Herr Hitler. Yet the socalled dictatorship of President Roosevelt has violated no law. It has been exercised in strict compliance with the provisions of a Constitution which with its rigid mechanism of checks and balances has often seemed to be admirably designed for not getting things done. Under Mr. Roosevelt's three immediate predecessors a large part of the energies of Congress was devoted to frustrating the work of the President, arid under Mr. Hoover especially with great success. But the grave peril of the country and the masterly leadership of Mr. Roosevelt have induced- the new Congress to refrain from obstructive tactics and to fall in behind him along with the nation-as a whole. The result has been to show that the American Constitution, which under normal conditions is .so' cumbrous in its operation, may in a national emergency provide a strong President with extraordinarily effective powers for rapid, and drastic action. . How completely the personality of President Roosevelt has 'asserted itself during the twelve eventful weeks in which he has turned the thoughts of his countrymen, and to a considerable extent those of the world also, from despair to hope is indicated by the terms of the message in which his, appeal to Congress for help on an important issue of policy was reported on Saturday. President Roosevelt on Friday decided that the' United. States should go off the gold standard by statute, and requested the chairman, \Mr. Steagall, of the House 'Banking Committee, to introduce a motion jplacing the country off the standard by law. On the first business day after his inauguration the President had virtual ly brought the country off the gold standard by his embargo on gold, though it w^s officially denied at the time by the Secretary of the Treasury—the highest, authority on such a subject next only to the' President himself. But .there was no denying what had happened on April 19 when the embargo was renewed and the same authority hastened to affirm that the President's action had "sent the United States off the gold standard." It was clear that the United States Had now come off gold and was intended to stay off, but for some reason not stated the President wants Congress to help him in making the'position doubly sure. Our immediate point, however, is that it is not a request but a decision that Mr. Roosevelt has communicated to Congress. He has "decided that the United States shduld go off the gold standard by statute," and apparently Congress's only function in the matter is to carry out -the decision and pass the necessary measure. The abandonment of gold is, however, a matter so universally approved that Congress will be glad enough to pass Mr. Steagall's Bill, and his speech gives foreign nations a strong reason for welcoming it. The most serious indication of AngloAmerican friction that we have noticed since Mr. Mac Donald's return from America was conveyed in a message from Washington dated May 4:— . '■ ! ' It is unquestionable that today's debate in the British House of Commons, expressing the strong dissatiafaction with tho American attitude on tariffs and debts, and America's failure to meet her contract to pay interest in gold has created a very strong impression here., We-were told at the same time that the Washington Administration was "hoping that London will act in accordance with the spirit of the Roosevelt-MacDonald communiques." But surely London had a right to feel that it was Washington that was violating that spirit when it elected to pay in paper while cohnpelling its debtors to pay in gold. This kindof "one-way traffic" was not calculated, to promote international harmony, and it is highly gratifying to have his assurance that the repeal of the Gold Standard Act for which he has moved will remove this grievance. ■ Under the resolution, he said, no bonds or obligations of the United States Government, and no obligations in any form would have to be paid in gold or gold currency. AVhen the measure was enacted ho said that it would be possible for fovcigu debtors to pay their war debts to the United States in any legal money. London might therefore seem to

have stronger ground for rejoicing at the effects of President Roosevelt's latest decision tlVan New York and Chicago. Yet it is in accordance with the difference of the national temperaments that Wall Street and the Pit should be. moi'c violently agitated than the London Stock Exchange. The stabilising eff Bet of the measure is one reason for Aanerican approval, but the eager weldtxme that it has received is having an unstabilising I effect. New York reports "one of the largest buying vtaves for a Saturday session in yearst" Wall Street buzzed with the possibility of the establishment hero of an open gold market, pc&rmitting gold to advance above the legjal level. Following the proposed voidiittg of gold clauses in public and private' .obligations gold issues started in a wild' flurry of buying that swept through virtually all categories, shares awl commodities surging up in sympathy. From London the abandonment of the stipulation for the> payment of war debts in gold is reported to have had "an instant stimulating effect" on the Stock Exchange. In particular there was "a marked revival in giltedged stocks" which had been steadily declining for a month, and some British funds had advanced more than 1 per cent But there was no "wild flurrying" and no dramatic "surging," and it was better so. President Roosevelt has remowed, t or at any rate mitigated one of the discords threatening the harmony; of the Economic Conference, and We should be glad to think his peace policy is equally secure from the hostility of Congress.-