OPPOSITION STARTS

Poverty Bay Herald, Volume LX, Issue 18253, 23 November 1933, Page 7

OPPOSITION STARTS

ROOSEVELT’S POLICY ADVISER’S RESIGNATION DECLARATION OF “WAR” (Elec. Tel. Copyright—United Press Assn) (Received Nov. 23, 11 a.m.) WASHINGTON, Nov. 22. Mr. O. M. W. Sprague’s resignation from the position of adviser to the Treasury was a curt and concise document in the form of a letter to Mr. Roosevelt. After expressing his displeasure at the necessity for leaving liis post, he chides the President, for declining to discuss matters with him since the fiasco of the stabilisation plan at the London Conference He states that he is unalterably opposed to gold purchasing for two reasons : (1) lie believes that it will prove ineffective iu raising prices; and (2) that it will so un.dermine the Governmeht credit as to make a repudiation plan, or the issuing of fiat money, the inevitable alternatives.

“I am convinced,” he said, ‘‘that the gold policy will prove ineffective in securing a speedy rise in prices. This is not because of my inability to depreciate the dollar. When a government announces its determination to depreciate its own currency, it. can certainly be accomplished, and without the necessity of acquiring any considerable amounts of gold in other countries, since no sensible person will desire in such circumstances more of that currency.

‘‘But the mere depreciation of currency will not bring a general rise in prices at a time when there is a large excess plant capacity, and millions of unemployed wage-earners. There is nothing in the depreciation of the dollar to induce an increased demand for materials and labor. A few prices will vise, particularly those commodities such as cotton, that are exported in large amounts. A few others may advance somewhat, hut the advance will rest on an unstable foundation, since there is nothing in the dollar depreciation to increase domestic consumption.” SOUND MONEY DEMANDED

Mr. Sprague expressed the opinion that a higher price level will come only after trade recovery, and will not produce it. “Our immediate concern,” lie said, “is to extricate ourselves from the depression rather than with the course of prices after that happy event.” Discussing Government credit, lie said : “The recovery programme involves expenditures far in excess of current revenues. Certainly as much as £400,000,OCO must be borrowed during the remainder of the fiscal year. Government bonds are an unsatisfactory investment at a time when the Government is determined to depreciate currency. Already many issues of Government securities have dropped below par. I believe you are faced with the alternative of either giving up the present policy or meeting Government expenditures with additional paper money. You would then, no doubt, secure a rise in prices, for you will he faced with the distrust of currency already manifest, in the growing flight from the dollar.” Mr. Sprague closes his letter with the announcement that as a private, citizen ho would continue to light for sound money.

“I have mow reached the conclusion,” he said, “that there is no defence from drift into unrestrained inflation other than aroused and organised public opinion. It is for the purpose of contributing as 1 may to such a movement that, with feelings of profound disappointment, 1 sever my connection with the Administration.”

A message from Warm Springs, Georgia, states that Mr Roosevelt is going ahead with tho United States dollar revaluation programme, and is leaving the issue with the actingSecrctary, Mr Henry Morgenthau. while he continues his vacation.

This is accepted ns the President’s answer to the resignation of Mr Sprague, and his proposal to organise a movement against the Administra tion’s monetary programme. .Mr Stephen T. Early, the President’s secretary, replying to questions, said Mr Sprague’s action would not affect the monetary programme. Mr Sprague had not been in the President’s monetary conferences since the London Economic Conference. OPENING GUN IN BATTLE The New York Times’ Washington correspondent says it is obvious that tho Administration fully realises that Mr. Sprague’s resignation is the opening gun in the public battle over the President’s fiscal policy. For some time, in fact since the London Conference, Mr. Sprague has been out of sympathy >vith Mr. Roosevelt's policy, and wished to resign at first, though Mr. Woodin and other spokesmen for the President urged him not to resign, but later, if he did resign, to refrain from publishing such a “blast” as he did to-day. “Those requests Mr. Sprague chose to ignore, and, in doing so, he has obviously embarrassed the Administration,” says tho correspondent. “Heretofore, opposition to the gold policy has been mute and scattered. In view of the seriousness of the economic situation and tho recent break in Government credit, many opponents have hesitated to speak their minds, or to attempt to organise opposition. Now Mr. Sprague has resigned for that very purpose, and this may fuse the opposition, and perhaps force the Administration’s policy into the open. Otherwise such, opposition might not have appeared in any formidable shape until Congress is convened in January. It is possible, of course, that inflation could come before then, as the Treasury must meet heavy refinancing on December 15.” DEPRECIATED DOLLAR HANDICAP TO EMPIRE DEMAND ECU PROTECTION (Received November 23, noon.) LONDON, Nov. SB. Tho British Empire Producers Organisation passed a resolution calling tho Government's attention to the serious effects of the continued depreciation of the dollar on Empire primary commodities. and recommending Empire Governments to take united action to safeguard tho .interests of producers regarding economic price levels, and to maintain the full benefits of Empire preference. The Daily llevald says: “English canuers fear a' heavy increase in imports of American tinned fruits and vegetables as a result, of the depreciation of the dollar.”

Tho dollar exchange rate, is to-day quoted at 544 J cents to the pound.