POWERS FOR PRESIDENT

New Zealand Herald, Volume LXX, Issue 21473, 22 April 1933, Page 11

POWERS FOR PRESIDENT

NEW BILL DRAFTED

EXTRAORDINARY PROVISIONS GERMS OF MANY SCHEMES POLITICAL AND ECONOMIC By Teleirrnph—Press Association—Copyright (Received April 21, 0.35 p.m.) NEW YORK, April 20 Rapidly sizing up tho turbulent reaction to tho inflationary movement President Roosevelt to-day collaborated with tho advocates of currency expansion in drafting legislation intended to bo acted upon without delay. The leaders of Congress struggled to overcome constitutional blocks in tho proposed legislation, and tho draft of the schemo in the form of a proposed amendment to the Farm Bill was completed by the Democrats lato to-night. L nder a provision authorising new currency up to 3,000,000,000 dollars, Mr. Roosevelt would have power to direct tlio issue of supplementary currencv. Other details of tho proposal aro withheld pending its introduction in tho Senate, but it is also understood to authorise tho President to accept Tip to 100,00(1,000 dollars in silver as part payment of war debts and to reduce tho gold content of the dollar. Unlimited New Currency The leaders said the bill would not bo pressed to a voto to-night, but it would lie on the table for action to-morrow. Tho bill, it is said, also would givo the President authority to issue unlimited new currency as legal tender under the old greenback law, and would also enable him to reduce tho gold content of the dollar by international agreement, or otherwise to overcome constitutional objections. The latter proposal, it was tentatively agreed, would limit this authority to reduction of the gold content of the dollar by 50 per cent, the same principle as was involved in his control over tariff rates. President a Monetary Dictator There is no gainsaying the fact that the Black Bill, as it is called, which tomorrow probably will bo passed, gives the President power to do many extraordinary things, but it does not make it mandatory. From Washington comes word to-night that the bill is "90 per cent; psychology and only 10 per cent dynamite."

Thti Black Bill represents a compound of many ideas and contains the germs of many schemes that have been advanced in and out of Congress. By its composite nature it not only represents all views, but bespeaks the support of all factions with the possible exception of a small minority. Its major import and its sufficient safety-valve lie in the fact that Mr. Roosevelt is made a monetary dictator with discretion not only to do such exceptional things for instance as to bolster up Federal stocks by open market operations, but also to negotiate a wide range of treaties of a political and economic nature with foreign Governments.

Credit Inflation the Main Object

To-day the United States is off the gold standard, but to-morrow the President will have power to return to it. The same applies to other steps with which the measure empowers him. Mr. Roosevelt, as a known " sound currency " advocate, is said to be basically opposed to " tinkering " with the currency. He does not want monetary inflation. He wants credit inflation so that the wheels of industry and production may start moving on a large scale with the attendant benefits. It is felt that if the President finds that the experiments which the Black Bill will allow him are not producing the desired credit expansion, without injurious effects on the monetary system, he will quickly abandon them. People's Impatience Sharpened It is no secret that in spite of the general good nature and willingness to " follow the leader " with which the American people have accepted Mr. Roosevelt's programme in the jiast six weeks, all that vast tier upon tie- of legislation has resolved into America trying to " lift herself by her bootstraps." 11, has not been without grandeur, but it has been exasperatingly slow as concerns the end and results. The people's impatience, sharpened by years of suffering, began to voice itself in Congress by well known and well calculated demands for a radical inflation of the currency and a radical change in the monetary system. Had Congress been allowed to have its own way there is no saying what unorthodox measures in regard to money it would not have forced through during the next few weeks, apart from otherwise disrupting the legislative programme of the President. The best opinion is that Mr. Roosevelt, by putting himself at the head_ of the movement, has cleverly stopped it.

GERMAN FINANCIERS VIEWS ON THE SITUATION AMERICA'S MOVE NECESSARY BERLIN, April 20 German financiers consider that the fluctuations of the dollar cannot touch the dollar exchange in the long run. America is the world's greatest creditor, and the continuous demand for dollars will maintain the dollar quotation near panty- . . . America's action, it is considered, was necessary to prevent irregular with- ! drawals of gold. It is not likely that it will affect German currency, which the stocks of foreign currency adequately protect. However, a lasting depreciation of the dollar would decrease German exports, and possibly necessitate a moratorium. A despatch from the Hague states that Holland is not likely to abandon the gold standard. EFFECT IN CANADA BENEFITS ANTICIPATED TORONTO, April 20 The close of the Canadian markets to-day revealed an optimistic tone with rises right down tho line. There was nothing to discredit the general opinion in financial and industrial circles that Canada will be the gainer by the action of the United States in regard to gold. Montreal reported wide gains in stocks, though the close found prices below the day's top levels, but in Toronto the general list closed near the clay's best rates after tho most exciting day for four years. Now that the exchange stumbling block has been largely removed, the Prime Minister of Canada, Mr. R. B. Bennett, is reported to be drafting definite reciprocity proposals to be mado to America at the Washington Conference.--