GOLD AND THE DOLLAR

Evening Post, Volume CXVI, Issue 144, 15 December 1933, Page 10

GOLD AND THE DOLLAR

INFLATIONARY THREATS

SENATOR AND STABILISATION

(Received December 15, 1.30 p.m.) WASHINGTON, December 14. . Senator Thomas declared that he had been informed that the New York Federal Reserve Bank is negotiating with the Banks of England and Franco with a view to stabilising the dollar at about 62 cents. He immediately issued a statement denouncing stabilisation at any figure above 50 cents, and threatened 'an inflation fight in Congress if President Roosevelt agrees to the proposal; Senator Thomas said that a higher stabilisation would produce a terrible situation and would probably result in the collapse of the President's recovery; programme. He- predicted that the vari« ous elements of the inflation group have a majority in Congress, but probably were not strong enough to override a Presidential veto. The Acting Secretary of the Treasury (Mr. Morgenthau) again denied reports of negotiations proceeding for currency stabilisation agreements between Brf» tain, France, and the United States. Senator Thomas, commenting on tha unchanged price of gold, said: "T,he longer that goes on, the more stable the dollar becomes. This sort of confirms more and more the impression that the President thinks it is about where it should be' stabilised." : / Speaker Rainey, of the House of Representatives, said that President Roosevelt proposed that the free coinage of silver "would go through the House as if it was greased." He advocated a 20 to 1 ratio with gold. "This," he said, "would be a method of avoiding inflation. After all, Bryan was right." It was disclosed by Mr. Jones, of tha R.F.C., today that Professor Warmer, Agricultural Economist of Cornell University and avowedly President Roosc velt '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 today in the foreign ■ exchange markets. The franc rose to 6.13 cents, and the dollar dropped to 63.80 cents in gold, as against the franc. Sterling rose to 5.11. Stocks rose a little in response to the. falling dollar, but commodities were slow to follow. The heavjf decline in the '- gold value of the dollar was held by Wall Street to be due to Senator Thomas's inflationary talk.