AMERICA’S DECISION

Northern Advocate, 22 April 1933, Page 6

AMERICA’S DECISION

Since his inauguration as President of the United States, Mr Franklin Roosevelt has done many things which have astonished the world. Circumstances have driven him to do these things. Whether they will achieve the desired purpose remains to be seen. At the moment, he, as speaking for the Administration, has thrown the nations, but particularly Britain and France, into a state of excitement by taking the United States off the gold standard. This action, coming as it does on the eve of the arrival in America of Mr Ramsay MacDonald and M. Herriot. representing Britain and France respectively, who have been invited by Mr Roosevelt to discuss, with him the forthcoming World Conference, has given a new complexion to the whole outlook. Mr MacDonald and M. Herriot received the news on board ship in the Atlantic, and their immediately conferred with their economic advisors, .but, beyond saying that the circumstances conditioning their meeting with Air Roosevelt have been drastically changed, they have refused to comment upon a development which may vitally affect the future of the world. There is wide divergence of opinion as to the reasons for Mr Roosevelt’s action, which, if the need were not most urgent, would surely have been delayed until the conference hetwen Britain, France and the United States had been held. Britain was forced off the gold standard because of the drain of her gold to foreign countries, but America’s vaults are full of gold, so that there is no parallel between the. actions of the two nations. It would seem, however;- that America has A been steadily heading

for the decision which she has now taken. Sir Walter Layton, the eminent economist, writing in the “News Chronicle” on March 6, when America declared a banking holiday, made the following prophetic observations: “When the banks reopen, it is more than likely that a great increase of currency will be needed. America would, in fact, have, embarked upon a course of inflation which would create renewed doubt of her ability to keep the dollar on gold. It is,, in fact, difficult to see how America could do so except by a system of exchange control, which would be extremely difficult to enforce in so huge a country. If America were to go off gold, avc should inCA'itably ha\ r e to face a period of uncertainty; for Ave could not hope to keep the pound fixed in relation to the dollar during the period of instability. A rise of the pound Avould be bad for our export trade, but unstable exchanges Avould be equally bad for the .United States. Both Bovernments Avould, therefore, luia'c the strongest inducement to get together as quickly as possible.” Tn view of this opinion, it Avill be (realised that the ucavs published today is fraught Avitli consequences of a far-reaching nature.