CONSIDERED FANTASTIC

Taranaki Daily News, 6 December 1929, Page 11

CONSIDERED FANTASTIC

REPORT OF .INCREASED NOTE ISSUE

By Teipgraph.—Preus-Association.

Washington, Dec. 4.

Considerable surprise was caused hero by the circulation of a report in Australia that the United States Federal Reserve contemplated •an expansion of the note issue in the interests of unemployment. It'is pointed out that while the report shows a 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 controling inflation.

An examination of the Fcde.*.l Reserve Act shows that main body notes can . only be issued against commercial obligations. This would make impossible any arbitrary expansion and, moreover, the information that unemployment, to any extent 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 it is considered to be fantastic.