AMERICAN PLAN.

Star (Christchurch), Volume LXVI, Issue 20205, 16 January 1934, Page 7

AMERICAN PLAN.

Dollar Worth 50 to 60 Cents if Congress Agrees. PRESIDENT ROOSEVELT’S PLEA. (Continued from Page 1.) United Press Assn.—By Electric Telegraph—Copyright. (Received January 16. 1 p.m.) WASHINGTON’, January 15. The United States Treasury has increased the price of newly-mined gold by 39 cents an ounce to 34 dollars 45 cents. President Roosevelt’s long-awaited monetary message was presented to Congress to-day. In substance it recommits the Administration to a “ managed currency ” programme, with definite stabilisation still held in abeyance pending what the President terms an “ ultimate world-wide solution ”. As predicted, Mr Roosevelt would have Congress authorise the impounding of about four billion dollars of the nation’s monetary gold into the Treasury for revaluation at a figure between 50 and 60 per cent of the old statutory price, 20 dollars 67 cents an ounce, or, in other words, reduce the dollar’s value to between 50 and 60 cents. Profits accruing from this transaction, it is estimated, will be about two billion dollars, not added to the Emergency Appropriation Fund, as many here predicted, but to be allocated to a special fund some features of which are comparable with the British Equalisation Fund, for the purchase and sale of gold on foreign exchanges and Government securities to keep the nation’s currency at the desired parity on the foreign exchanges. The President specifically requested that the Treasury be given authority to handle such operations, terming the Reconstruction Finance Corporation handling of such functions .as “ clumsy Government’s Rights. After a lengthy dissertation upon the Government’s historic, sovereign right to control the medium of exchange and with a reiteration of the Administration’s desire to “ restore a fairer price level with the purpose of arriving, eventually, at a less variable purchasing power for the dollar,” Mr Roosevelt requested flexible power in fixing the value of the dollar. He would have Congress limit the fluctuation of the dollar so that it shall not go above 60 cents and as under the present law (embodied in the Thomas Amendment) it cannot go below 50 cents, thus in effect the dollar will maintain a ten point margin for “ bargaining purposes.” International stabilisation conversations, it is assumed, will eventually be undertaken. The momentous question of the issuance of greenback for fiat money is ignored in the recommendations to Congress, but at a Press conference the President expressed the opinion that his message would be a powerful argument to Congress against printing press money. It is understood, however, that he does not completely disfavour the suggestion of a “ limited ” amount of five and ten dollar noninterest carrying “ bonds,” which might be issued to relieve the Government’s financial stringency. If such bonds are issued, their sponsors insist they would eventually be retired by sound currency and would not constitute a permanent addition to the nation’s money.