REVALUING THE DOLLAR

Evening Star, Issue 21622, 18 January 1934, Page 9

REVALUING THE DOLLAR

ROOSEVELT'S MONETARY PROGRAMME NATIONALISATION OF GOLD APPROVED Press Association—By Telegraph—Copyright. WASHINGTON, January 16. Legislation incorporating President Roosevelt’s monetary programme seemed assured of early enactment today, as Governor Black, of the Federal Reserve Board, expressed approval of the nationalisation of gold, with the profit thereon going to the Government. A Republican Senate caucus failed to agree about opposition to the programme, but it was decided that the legislation should not be allowed to move with the rapidity that the emergency measures did in the special session. Members of the House, Banking, and Coinage Committees are bickering over which have authority in the matter, nevertheless reasonable speed in enacting the measure in the form that President Roosevelt desires*is expected. After midnight on ■ Wednesday gold coin will in effect be repudiated as money. According to Mr Morgenthau’s recent gold order, if'such is not turned into the Federal Reserve by then the banks will be authorised to confiscate it on presentation by individuals. Apparently it is to revert to the Government as part payment of the penalty for violation of the gold regulations, which is double the value of the gold held. The almost unanimous support for the President’s programme, with even the most conservative Press hailing it as the end to uncertainty, came as a revelation to. Administration officials, and they profess to believe that not only is the nation overwhelmingly behind the President, but that the .threat of a Congressional inflation revolt has been completely obviated. • THE STOCK EXCHANGE NEW YORK, January 16. Despite much profit-taking on yesterday’s advance, Stock Exchange prices forged ahead again to-day, with gains of one to several poiirts on an almost 4,000,000 .share turnover. Bonds were also stronger, but commodities turned slightly downward on the strength of the dollar, which, despite the advance of the gold price, gained fractionally against foreign exchanges. THE CANADIAN DOLLAR NEED FOR STABILISATION. NEW YORK, January 16. The Ottawa correspondent of the ‘ New York Times ’ states that after Mr Bennett had discussed the Roosevelt monetary programme to-day it was indicated that a Bill will probably be introduced into Parliament during tho coming session reducing tho gold content of the Canadian dollar. The need for stabilisation has been constantly urged by importers and exporters who do. most of their business with the United States. They state it would remove the uncertainty. There is now a strong agitation for a new gold standard of 14 or 15 grains of pure gold, so that the dollar’s nominal value may more closely correspond with its legal value expressed in gold, which is 23-22 grains troy, as provided in the statutes. The adoption of a lower gold content would eventually reduce the burden of all indebtedness payable in Canadian currency, and tend to increase prices of commodities in domestic trade. Some groups have been urging tho Government to increase the note issue tp 100,000,000d01. Mr Bennett, however, is known to\ bo standing firm for -.sound money, believing that such form of inflation would quickly lead Canada into insolvency. . “ ROOSEVELT OR RUIN " }' WASHINGTON, January 16. The Rev. Charles Coughlin, a Roman Catholic priest whose radio broadcasts have gained him a wide following, today informed the House Coinage, Weights, and Measures Committee that “ if Congress fails to carry through the President’s suggestions I foresee a revolution greater than the French revolution. It is either Roosevelt or ruin.” The committee, which is receiving recommendations for possible monetary legislation, also heard Mr Frank Vanderlip express approval of President . Roosevelt’s gold proposals. He suggested the creation of a new branch of the Treasury for tho purpose of handling all monetary matters now under the jurisdiction of other divisions. Senators M'Adoo and Glass, both former Secretaries for the Treasury under President Wilson, to-day questioned the constitutionality of President Roosevelt’£ proposal to seize the Reserve Bank gold and demanded a written opinion from the Attorney-General. INTERNATIONAL STABILISATION THE PRESIDENT’S HOPE. NEW YORK, January 16. The Washington correspondent of the * New York Times ’ says that the reaction of foreign nations, particularly Britain and France, to the Roosevelt monetary programme is awaited in high official circles with deep interest. Those who are eager that anything approaching an international currency and trade war may be avoided are hopeful that developments will soon make possible de facto stabilisation in concert with Britain. They point out that if the United States and Britain could reach an agreement which would ultimately lead to final devaluation by both nations after a test period on- a basis ac-

ceptable to President Roosevelt, it would bo possible to control the vast majority of the exchange transactions. An unofficial interchange of opinion between the Bank of England and the Federal Reserve Bank of New York is regarded as a probable outcome of the gold message. President Roosevelt has made it clear that he hopes for international agreement, but has indicated that up to the present this has not been found possible. OPINION IN LONDON LONDON, January 16. . The American currency developments are being much discussed in London. On the stock markets the tone in most departments is somewhat hesitant. City opinion regarding President Roosevelt’s message to Congress recognises that the measure announced is immediately directed at the American internal situation, and time will be required to assess its wider repercussions. BOOM IN GOLD SHARES LONDON, January 17. The effect of President Roosevelt’s decision on gold mining shares was electrical, and boom-like conditions prevailed in London and Johannesburg. The unexpectedly large advance in the price of their metal helped to send prices soaring. The market wavered later, and profit-taking developed. THE MONETARY BILL EARLY ENACTMENT ASSURED. WASHINGTON, January 17. (Received January 18, at 11,45 a.m.) President Roosevelt’s Monetary Bill, embodying nationalisation of gold and dollar devaluation, was sent to the printers after a few concessions were made by the President'/to meet constitutional objections. It is said that the revisions are slight and in nowise change the President’s original intention. Early enactment of the Bill is held to be assured. Press reports from London of AngloAmerican stabilisation at about five dollars to the pound drew the comment from the Treasury that no negotiations with Britain- werp now under way. While praising President Roosevelt’s Bill so far as it goes, Senator Thomas and his followers renewed the silver agitation and drafted a memorandum requesting the President to extend the purchases to all silver in the country, not mere ly to newly-mined metal.