U.S. FEDERAL RESERVE

Hawera Star, Volume XLIX, 5 December 1929, Page 7

U.S. FEDERAL RESERVE

BANK NOTE ISSUE. AUSTRALIAN REPORT “FANTASTIC.” (United Press Association —By Electric Telegraph Copyright.) Received 11.45 a.m. to-day. WASHINGTON, Dec. 4. Considerable surprise has been caused here by the circulation of a report in Australia that the United States Federal Reserve contemplated an expansion of the note issue in the interests of unemployment. It is pointed out that while the report shows cognisance of the sensational import of such step, it lacks familiarity with the structure or purposes of the Federal Reserve system. The latter was instigated bv President Wilson for the purpose of controlling inflation. An examination of the Federal Reserve Act shows that the main body of notes can only be issued against commercial obligations. This would make impossible any arbitrary expansion. Moreover, information that unemployment to any extent necessitating such desperate financial remedies existed in the United States or was at all impending, was received with incredulity. The Australian report cannot be understood herd and is considered fantastic.