To Prevent Inflationary Tendencies

Manawatu Times, Volume 66, Issue 2, 3 January 1941, Page 6

To Prevent Inflationary Tendencies

REORGANISING AMERICAN MONETARY POWERS Received Thursday, 5.5 p.m. WASHINGTON, Jan. 1. The Federal Reserve Board, in a special report to Congress, asked in tlie first place for drastically increased monetary powers at the expense of the Treasury and urged that the President’s power to devalue the dollar be allowed to expire on June 30. The report declares that broad 1 changes in fiscal policies and the mone-1 tary machinery were needed because in ■ view of the defence spending it may be necessary to take steps “to prevent inflationary tendencies attributable to defects in the machinery of credit control.” In the second place the Board recommended the immediate repeal of the Treasury’s power to issue silver certificates against the seigniorage of silver (the difference between the purchase price of 77 cents, an ounce and tbo established value of one dollar 29 cents, which amounted to 1,500,000,000 dollars on previous purchases). The third recommendation was the repeal of tlie Treasury’s power to issue currency against foreign silver; the fourth, the use of the Treasury’s stabilisation fund heretofore reserved for stabilising the dollar in relation to foreign currencies to absorb and control the excess reserves of the United States banks.