MUCH UNCERTAINTY

Poverty Bay Herald, Volume LX, Issue 18256, 27 November 1933, Page 5

MUCH UNCERTAINTY

U.S. RECOVERY PLAN CRITICISM AND DEFENCE NO CHANCE IN POLICY (Elec. Tel. Copyright —United Press Assn.) WASHINGTON, Nov. 26.

A Warm Springs message states that Mr. Franklin Roosevelt’s time was divided this evening by conferences with General Hugh Johnson and Mr. Henry M orgeat ha it, who were called here by liie President to discuss the National Recovery Act and the monetary policy respectively, in the face of Air. Ai .Smiths mill other attacks. There is authoritative confirmation from sources dose to the President that no change in (lie gold-buying policy whatever is contemplated. A Hood of attacks against Mr. Smith's statement has developed, mainly lrom Lite Democrats ami the Progressive Republicans. Senator Borah demanded that Mr. Smith and other so-called hart; money advocates should present an aluer.native plan other than a return to goid oil.the old parity. Conservative circles here show little desire to return to such a parity. The majority desire the stabilisation of the dollar at somewhere near the present level, with a modified gold standard and a limited currency con vertibility. NOVEL .MONETARY PLAN Air. Frank Vanderlip, on behalf of the Committee for the Nation, proposed a novel plan to stabilise Government credit in future by the Government issue of “commodity” bonds. The value would vary definitely with the commodity price index. For example', if the index went up 5 per cent, the current value of the 100-dollar bond would be 105, and if it declined by the same amount it .would be 95. The interest rate would be fixed, but it would be payable on the basis of Hie current value of the bond. Air. Vanderlip claims that it would remove investors’ fear to keep the bond market stabilised. He pointed out several obvious objections, but said that he was presenting the matter for public consideration.

General Johnson brought a score more completed codes to he signed by the I’resident,- who said he considered that Mr. Ford was obeying the National Recovery Act provisions, and indicated that the Government might be prepared to drop the case against him. It is hinted that Mr. Ford might soon sign the code. Although it has repeatedly been insisted that the National Recovery Act has nothing to do with monetary agriculture and other parts of the recovery programme. General Johnson has issued a spirited defence of gold buying. He said that the talk about the impairment of credit was silly. "If Mr. Roosevelt did cut the gold content of the dollar in two, it would still remain the best money in the world,” lie said. General Johnson scorned critics and said that Mr. Roosevelt ‘‘was not going to plunge over any abyss.” INCREASE IN EXPORTS With the Government's gold price again remaining unchanged, the dollar gained strength in terms of the franc and is quoted at 63.42 cents, up .08 cents, but depreciated against paper currencies, sterling closing at 520 cents, up 1-j cents. Security prices are irregular in small trading, and commodities are weaker. From Washington it is reported that the £140,000,000 new financing necessary to meet the obligations of December 15 is being considered “routinely.” It is positively stated that no fiat money is anticipated, although it is admitted that a sharp break in the Government bond

market complicated the situation to-day. The October exports are the largest for any month in two years, according to figures published to-day. The total aggregated £38,800,000, compared with £32,200,000 for September. The imports were £32,000,000. October’s favorable balance exceeds the previous month by £6,000,000. Officials describe the increase as partially seasonal, and partly due to “an advance in export values.”