AMERICAN FINANCE

Evening Post, Volume CXVIII, Issue 51, 29 August 1934, Page 10

AMERICAN FINANCE

MORGENTHAU EXPLAINS

EXPENDITURE JUSTIFIED

ECONOMIC RECOVERY

United Tress Association —By Electric Tele

graph—Copyright.

(Eeceived August 29, 2.30 p.m.)

WASHINGTON, August 28.

For the first time since he assumed tho difficult task of guiding the Administration's finances Mr._ Henry 'Morgenthau, jun., Secretary of the Treasury, addressed the nation over the radio tonight, outlining in considerable detail the Budgetary situation, the size of the deficit, and how the Treasury hoped to reduce i.t. : .

The most significant part of tho speech was the revelation of 2,500,000,000 dollars "gold profit" accruing from the devaluation of the dollar. Now ear-marked in the Treasury for a dollar stabilisation fund, it will "eventually" be used to. pay part of the National Debt. This naturally entails a measure of currency inflation with currency printed against the bullion and released for circulation. However, the word "eventually" is interpreted to mean at such a time as the financial structure is thoroughly sound and able to absorb it.

Mr. Morgenthau fixed the Public Debt at 27 billion dollars. It is, however, actually less, with 1,800,000,000 cash in the Treasury, gold profits to come, and the eventual, at least partial, repayment of the billions loaned banks, corporations, home owners,.farmers, etc. Mr.. Morgenthau frankly admitted that -the Administration was. still spending in excess of its income, and was likely so to .continue for some time, but the Administration was confident that economic recovery would justify the expenditure. '•■''.