INFLATION IN U.S.A.

Poverty Bay Herald, Volume LX, Issue 18066, 18 April 1933, Page 9

INFLATION IN U.S.A.

SENATE DEBATE REMONETISATION OF SILVER WOULD ENGLAND AGREE? (Elec. Tel. Copyright—United Press Assn.) (Received April 18, 3.15 'p.m.) WASHINGTON, April 17. Senator Wheeler (Democrat, Montana) bringing the coming Economic Conference into the Senate inflation debate, said lie did not believe that England would agree to remonetise silver because she had a trade advantage over America and wanted to keep it.

“‘Why should she?” Mr Wheeler shouted. “They want to keep us on the gold standard. We’ve never lost a war and never won ,a conference. One thing England is interested in is cutting down the debt she owes America. She is not going to permit the American dollar to be cheapened unless we cut those debts.”

Senator Borah -spoke on behalf of currency inflation, declaring that it was the only hope of aiding the farmer and raising commodity prices. 'Mr Rainey said he had not discussed the remonetisation of silver with President Roosevelt, and did not know the Administration’s attitude. lie would not take the initiative in pressing for silver legislation, adding that he would leave it with the President. “I think the United States can go ahead on a plan to remonetise silver without any agreement with England or France,” he added, “but it would be better if we can get the concurrence of those countries.” MORE ACTION WANTED PRESSURE ON ROOSEVELT SUPPORT FOR INFLATION VANCOUVER, April 11. Impatient because prices, except in a few commodities, show little sign of rising, the American public is beginning to demand direct .action from President Roosevelt. The advocates of a form of inflation represented by a do-valuing, of the dollar are fast increasing in number. Mr Roosevelt is said to be less keen than formerly that other nations should return to the gold standard as a condition of trade or war debt concessions from the United States. Stabilised currencies are what he is believed to favor now.

The President and many of the socalled inflationists are opposed to the printing of large quantities of currency notes; it is argued that there is a sufficiency of currency. The method favored in' many quarters is to raise prices by reducing the statutory gold content of. the dollar.

Mr Roosevelt and his Cabinet arc said to regard ex-Presideut Hoover’s insistence on an international adhesion 1,0 gold before considering 'concessions as an impossible fetish. The reason why they now advocate stabilised currencies instead is obvious, The demand for the lifting u'p of prices is becoming more and more insistent. , The United States lias discovered that nations do not slip of! the gold standard from choice. America a position in relation to gold is not what it used to be. Consequently the demand for a return to the gold standard is to-day pretty well washed off the slate. In the meantime, (pressure for action to do what Americans call “boost prices” crowds in from all sides, and for the most part it is in tho form of talk for inflation. Officials are struggling with the 'problem, but, are uncertain how to proceed. Congress may force the issue by inserting inflationary amendments in the pending Farm Bill. Demands for action are based on the contention that business will not expand until prices begin to rise. Some Washington leaders wish to wait in the hope that natural causes will start the. climb. They point to current rises in wheat, bogs and other products. Others, notably Mr Henry Wallace, Secretary for Agriculture, demand aggressive artificial restoration. HUGE BOND ISSUE? One proposal is for a bond issue of £1.000,000,000 for huge expenditures on public works. The second plan for speeding up the circulation of cash is to reduce the value of the dollar. The latter proposed is strongly urged by a powerful group of business men who are aggressively lobbying in Congress. This group would reduce the amount, of gold fixed by law in the dollar so that more money would be iepnmol to boy a given article. They nrguf that if such h, step wore oven thought to be. imminent the public would rush to buy before prices expand and, in that process, business activity would leap forward. There is a wide belief that President Roosevelt’s order which sought to gather in all boarded gold by. May 1, would place the Government in a position to take this action if it decided to de-value the dollar. Mr Roosevelt is opposed to the socalled “printing press money,” and many inflationists .also oppose it. There is more currency in existence than is required for present needs. Of £400,000,000 of new money authorised under the recent, Emergency Bank Act, only £3,200,000 has been put into circulation. . . There is plenty of money, but it is idle. What is needed is an active turnover. . . Nearly everybody in Washington believes that rising prices ,are necessary to start a rapid business turnover. Those who believe that a rise will come naturally are shrinking in number. Voices calling for artificial action by some form of inflation are growing rapidly, but, so far, they cannot agree upon a sure-fire method. The Chicago Tribune comments that the most amazing performance in American history has been going on during the last five weeks, and is still going strong. Old-timers are rubbing their eyes.

The President, dollied with enormous dictatorial powers by Congress, is engaged upon a terrific, reorganisation of the public services. _ Mr Roosevelt, shrewd observers believe, will either be a great public, benefactor or a fantastic failure. _ Mi Hoover, they say, relied for advice on successful business men. Mr Roosevelt lias called in the professors.