AMERICAN NOTE ISSUE

Otago Daily Times, Issue 20893, 6 December 1929, Page 11

AMERICAN NOTE ISSUE

REPORT ,IN AUSTRALIA. ; • E*XPANSION CONTEMPLATED. (United Press Association.) (Bj Electric. Telegraph—Copyright.) WASHINGTON, December 4. (Received Dec. 5, at 5.5 p.m.) Considerable surprise has been caused here by the circulation of the report in Australia that the United States Federal Reserve Bank contemplated the expansion of the note issue in the interests of unemployment. It is pointed out that while the report shows cognisance of the sensational import of "such a step, it lacks familiarity with the structure or purposes of the Federal reserve system. The latter was instigated by President Wilson for the purpose of controlling inflation. An examination of the Federal Reserve Act shows that the main body of notes can only be issued against commercial obligations. This would make impossible any arbitrary expansion. Moreover, the information that • unemployment to the extent of necessitating such desperate financial remedies existed in the United- States, or was at all impending, was received with incredulity. The Australian report cannot be understood here, and is considered fantastic.