THE H.B. TRIBUNE SATURDAY, MAY 11, 1935 THE UNSTABLE DOLLAR.

Hawke's Bay Tribune, Volume XXV, Issue 124, 11 May 1935, Page 4

THE H.B. TRIBUNE SATURDAY, MAY 11, 1935 THE UNSTABLE DOLLAR.

Though the many successes that attended Ids party’s candidates at the congressional elections last November seemed to indicate continued popular approval of President Roosevelt’s National Recovery policy, the evidences are daily becoming stronger that he cannot depend upon as docile a following as before. To-day, for stance, wc have further word of a threatened crisis in connection with the Veterans’ Bonus Bill ■which, against his will, has for some time been before Congress. This measure, if passed, would provide for a present cash commutation of the absurdly lavish compensatory pensions that were in times of lush prosperity, voted for those who had been called to the colours during the Great War. Seeing that the United States was actively and substantially engaged only during some few months of that great struggle, and even then had but a comparative handful of forces at the front, the puzzle lor most people will be to understand whence all this great host of American “veterans ’ has come.

The fact is that the pension list includes practically all those who were taken into camp, of whom a very big proportion never even crossed the sea and a still bigger proportion never had the chance of smelling smoke from the enemy’s powder. However, in an access of patriotic fervour, all were embraced within the original pension scheme and hence the immense sum—the equivalent of about £4oo,ooo,ooo—that is required for buying them out, for that is what it all amounts to. The whole thing furnishes a glaring case of the- barefaced political bribery for which America has gained so unenviable a reputation. The President has from the beginning set his face sternly against it and has indicated clearly that, even if the Bill is passed by Congress, he will exercise his power of veto in order to negative it. His veto can, however, be overcome' by a twothirds majority vote of each chamber of the Legislature. It is evidently feared that such a majority will bo forthcoming in both the Senate and House of Representatives, thus showing the extent to which the President has lost the control he has hitherto been allowed to exercise. There is, however, another aspect of the movement which is commanding attention among the economists and the business men of the country. The Bill proposes that in order to provide funds for the cash payment that is in contemplation there should be an issue of Government paper currency to the amount required. Coming on top of the many inflationary measures to which the President himself has had recourse in an endeavour to lift commodity prices to a remunerative level, this has occasioned considerable alarm among those whose opinion is that q'.'ite cnoug’’ has already been done in this ; direction. It is doubtless by this

section that the measure has been dubbed the “Greenback” Bonus Bill, recalling a similar recourse that was taken during and after the American Civil War of seventy years ago. Then, to meet the financial emergencies of the day, the Federal Government issued green-backed paper money that was made legal tender, Put which rapidly lost purchasing power until in the end it became worth only about 35 cents to the face dollar. Under the conditions that then obtained the early redemption of these notes became a matter of impossibility, and for many years they lay like a pall upon the business of the country —a notable contrast to the rapidity with which the British “Bradburys” were withdrawn from circulation after the Great War ended.

What occasions apprehension in the business world, not only in the United States but elsewhere also, is that President Roosevelt has set on foot a movement that he looks like being unable to control, or even to direct. Complaints have already been loud that, even alter two years or more of practically unrestricted experimentation, he is still unable, or at any rate unprepared, to declare a set monetary policy upon whose execution the business world, both at home and abroad, may place reliance. Until he does this both the internal and the international trade of his own country, as well as of others, must necessarily suffer from the day-to-day uncertainties that attach to the value of the United States dollar.