GOING OFF GOLD

Northern Advocate, 20 April 1933, Page 5

GOING OFF GOLD

ROOSEVELT DICTUM CONTROLLING PRICE LEVELS REMEDIAL DOMESTIC MEASURE. INAUGURAL STEP.

(United Press Association —By Electric Telegraph.—Copyright.) (Received noon.)

WASHINGTON, April 19

President Roosevelt announced today the restoration of the gold embargo as a move to improve domestic commodity prices. Mr William Woodin, Secretary to the Treasury, said today that the action of the President in forbidding Hie export of gold had sent the United States off the gold standard. This is the. first step in the campaign that Mr Roosevelt lias undertaken, to establish controlled price level and controlled credit to counteract deflation.

The word * 4 inflation ’ ’ is not particularly,in the Roosevelt vocabulary, as bo maps this campaign to improve the domestic situation. Rather he prefers to speak of controlled new price levels. Additional stops arc in prospect. The President is -waiting' the effect of today’s move on gold, however, to determine the extent of Die next step. President Roosevelt apparently has won a respite from the leaders in Congress, who have been hammering for an outright currency inflation. ; Mr Roosevelt considers that the heart of the problem will be the raising of the price''level, but he wants it raised- in such a manner that it will be under control for all time and not permitted to go too high. Controlled credit also is a factor in his programme. Restoring Normal Basis. 1

The forthcoming international economic discussions are part of the general manoeuvre to restore the United States to a normal basis of available cash,, jobs and credit, and the President hopes to get the world back on the gold standard. This standard may be on a different gold ratio for the backing of currency than in the past, but he is adamant for stabilisation of the world’s monetary situa-

lion. The revocation, effective immediateof the licenses for the export ,of any more gold appears to be part of his international programme, giving up. his attempt further to support the American dollar in foreign exchange. This is regarded as serving the dual purpose of increasing American commodity prices ■ and putting the President in a.- strategical position for the economic bargainings.

Just how the gold embargo will react to raise American commodity prices is somewhat involved. It was explained that cotton, for instance, is sold on a gold basis. On the presept basis rate it' is about sixpence per pound, and, should the price of gold side off 10 per cent, a resultant ■,increase in cotton of 10 per cent, is , regarded as inevitable.

A public works programme is also contemplated by the President to stimulate employment, but it is likely that his plan will not be anywhere near the four billion or live billion dollars advocates in some sources,’;]