U.S. FINANCIAL POLICY

Northern Advocate, 6 February 1936, Page 5

U.S. FINANCIAL POLICY

PRESIDENT'S OPPOSITION TO INFLATION

(Received 10 a.m.)

WASHINGTON, February 4,

As an indication that President Roosevelt not only is determined to checkmate inflationary moves, but is preparing to curtail the Government’s reflation activities, he announced today that he had ordered a survey of the Federal lending agencies, with a view to cancelling at least 1,000,000,000 dollars of lending organisations. • This is interpreted as meaning the so-called “pump priming” activities of farm and home loan banks and other Government organisations are near an end.

It is understood that Mr Roosevelt believes normal sources of credit now are open to legistimate borrowers.

A Novel Scheme.

Mr J. H. Lewis, Democrat member of the Senate for Illinois, who is noted for his continued agitation regarding war debts, advanced a novel scheme today for meeting the country’s financial difficulties. Speaking in an ironical vein in the Senate, he suggested# that Britain and France should pay “six billion dollars owed to the United States,” which could be used for the payment of veterans and farmers, pointing out that soldiers were being paid for services on foreign soil.

Mr Lewis’ plan envisages debtor Governments issuing bonds of small denomination, aggregating the amount owed to the American Treasury, which would market the bonds and supply the proceeds to the Government’s need.

Shipments of Gold.

Shipments of gold from the United States total about 6,000,000 doljars, consigned to Holland and France. It is announced that 5,000,000 dollars worth more is earmarked for shipment.

A variety of forces today worked to check the weakness of the dollar. The franc failed to go as high as yesterday, chiefly owing to selling against gold shipments, while sterling went below 5.3 dollars, ostensibly as the result of the British equalisation fund working through Paris. Within limits, the United States Treasury looks with equanimity upon the weakness of the dollar. It is not very concerned over the outflow of gold, provided that it continues at a moderate pace, because America’s gold stores total 10 billion dollars and remain an enormous credit reservoir. The depressed dollar has encouraged foreign purchasers of American goods.