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Show \ : mil WIll i Till Use Gold " Trofit "Profit Profit " - . l } , 1 1to to Retire Bond Issuesr Issuesublic Issues Issuesfablic } ? r fablic ablic ublic Debt to Be Reduced Rcduced $675,000,000 675000000 $ , , in \ Move I\love I love byf byTreasury byTreasury by f ( Treasury That Is Unprecedented in Ann.lls Annlls Annals Annalsof AnnalsI . of Federal Financing . } \ I 1 By WILLIAM C UTLEYy UTLEYNCLE UTLEY y NCLE SA SAM I has readied reached Into IntohIs intohis Intohis UNCLE hIs jcins je\ns je ns jeans ' \ for tor the thc first time to tospend tospend to\ to tof \ f spend spenu . , In any largeVa large was tva3 \Va Va \ ) , theI the I ( gold profit 'profit ' " resulting resultlOg ! fiom from Iom the theevaluatlon theevaluation evaluatlon TaluaUon of the dollar doll'lr dolllr ' . By August'the Augustvthe August Augustthe 'the the vthe ' the government will wlll hate hn ha [ e retired t\\ t tw t0 ting t\vomfi t vomfi \ \ 0 o oing ing standing Issues Issucs of or 2 per cent fedml fed fcd ml al 1 bonds , reducing the now stagger stagger1c staggerig 1c g public debt by almost $075,000,000ftd 075000000ftd $675,000,000Dd $075,000,000 075000000 $675,000,000 675000000 $ , , Dd d easing the carrying charge ot or of the theIttonal thelttlonal thelUonal Ittonal lttlonal debt by $13.500 13.500 13500 $13,500000 13500000 $ , , . 000 a year . iln In 'In ) ' effecting the move , the Tre'lsury Trelsury Treisury Tre'lsurypartment Treisuryapartment Treasuryapartment ' partment apartment ! will wOI cluse C'luse cause ' the withdrawal withdrawaltall withdrawalt withdrawalr r tall all 1111 national bank banh notes from clrcu clrcutilon clrcuStlon circuttlon Stlon tilon , further turther concentnting concentr'lting concentrlting concentrating ' control of ofae ofle ofie ae le currency currcncy under tlie the federal got go , ern era ernent eraent erncnt ent . The act , \ which blch Is hailed as the theDt thepst theost pst Dt ! Important financlil financl'll financlll financial ' one of ' Frank r'ranl rranl > n 6 & D . Roosevelt's Roosevelts Roose.elt's Roose.elts Rooseelts . ' admimstritlon admlnlstr'lllon admlnlstrlllon admiuistratton ' and Is IsJthout Islthout Isthout Jthout lthout ( precedent precedcnt In the annals of fedcal fed 1 cal ' financing fin.lnclng finlnclng . , . , Is In no way Inflationy Inflation 7 y y , . according to leading lC'lding lClding ' bankers , as asen asell asell en ell as Henry Henr W . Morgenthuu Morgenthau , secre-- secre secre- secrecy secrery secrc-ly secrc ly - - ry cy of ot the treasury tre'1sury tre1sury ' , and Thomas Jefrson JefTson Jef- Jef Jefson - Tson : rson son Coolldge CooUdge Coolidge . , undersecretary under seci secietiry et'lry etlry ' , oho ohoode \ whoade bo ode de the announcement It does docs , how- how Bow- Bow Bower hower how-'er how 'er er - er ' ' er , , create some potential opportunIty opportunityr r r inflationAbout Inflation InflationtAbout tAbout About bout $2,000,000,000 2000000000 $2,000,000.000 2000000.000 $ , , , . of the gold goldrofits goldrofits goldroflts rofits " will wllI continue to remain In the theibJUzatlon theiblllzatton theiblllzatlon ibJUzatlon iblllzatton fund 'lhe lhe The I ' he fund so far farII fare farji e II ! been called upon for tor the larger largerart largertrt art " only for support of the dollar on onjchange onphange jchange hnnge marl.etsKeeping marketsBeeping markets marl.ets marlets marketsKeeping . Keeping Beeping such a profit 'on on ' on Ice ' vasiked waseked "as as was " , eked > ked upon as a waste of resources by bye bye e treasur treasury } . The dep'll depll depiitnient department ' tment found foundat foundat foundat at It could put some of these renrces re- re renrces re-forces re forces - - nrces to " work "ork ork , . and at the same timeincentrate time timeocentrate incentrate ocentrate centrate federal control of tlie the cur curDCY curacy curncy DCY acy , which has been one of or the ob ob2tlves obitlves tlves 2tlves of the banking banl.lng banllng . bill before con congss contss gss , by retiring bonds which wblch carry C.lrry Clrry carry"circulation . "circulation circulation ucIrculation " privilege prhlIege " These areids are .p p . -ids ids - pas .s s . which the national banks banl.s banls . deposfas deposfas depos fas as collateral when they issue nanal nasal na nanal nal sal bank notesl'he notesThe notes notesThe ' The l'he lhe government will , as opportunityers opportunltyerst opportunityera opportunity opportunlty erst erstsub.tltute ers era , substitute sub.tltute subtltute : . federal reserve notesnational notes notesr notest r r t national bank notes , of which theree there 6 e $657,937.080 657937.080 657937080 $6:57,037,080 657037080 $657,937,050 657937050 $ : , , . , , outstanding outst'lnding outstlnding ' This wlllTe willre will wlll willive ive Te re only three kind kinds " of at cuirency cmrency ineulattonsllver inculatlOnslIver in inculation culatlOn-slIver culatlOn slIver eulatton-sllver eulatton sllver culation - silver certificates certlfic'ltes certlficltes ' , , UnItedtes Unitedtes United Unitedites ites tes notes and Federal Federl . ! ReserveeSt Reservees Reserve Reservetes tes eSt es . eStt r t ' Relic of Civil War Finance FinanceChe Che 'be be 'he he [ ' [ ' national nation'll nationll ' bank banI " note Is 15 a relic offinancing of , financing of the Chll Cisli Ch 11 \ war ar Beforevirtually Beforevirtually Before BeforeS virtually all banks were Issuing issuingculating Issuingulatlng S culating : ulatlng notes , " \ whose hose value , be- be bee - - belse beISe lse ISe > e no law made all currency Inter- Inter InterLngeable Intertngeable Inter-ingeable Inter ingeable - Lngeable tngeable at par , as It Is now , varied variedInverse variedInverse variedInverse Inverse ratio to the geographical geographicalance geographicaltance ance of the notes from the b'lnks blnks banks b'lnksch banksch banks.ch banksch ' . ch Issued them A note Issued Lssued by byn1 byrib byank n1 rib . In Springfield , . 111 III Ill , , was good tor for torface forface forface face value In to SPI Spungfied Spiingfield mgfieJd ! , . , where whereerybody whereerybody whereerybody erybody and his biother bi bl other ' knew l.new lnew . the thek thek thek k . But In Cle Cle\ Cle Cleeland Cleveland \ , eland , , Ohio , It wasth wasless was wasth ; th less , and In ' Trenton .rrenton rrenton . , N J , , stillith still ? Ith the need for more money press pressdurIng pressduring pressduring durIng Civil war time , . the go.ern- go.ern govern- govern govern-t govern t go.ernt governt . - t Issued a new kind of ot currency currencyed currencyd d United States notes , . which theIr theirr r soon earned the name "green green "greenrs greenrs "greens " s . , " In addition , . to the b'lnks blnks banks b'lnksh banksb banksch ' h b purchased war svar bonds . , It granted grantedprlvllege grantedprivilege granted'privilege grantedprivilege ' prlvllege privilege of ot Issuing another form formcurrency formcurrency formcurrency [ currency , national natlOn\l natlOn l ' \ bank banI " notes notese notesre e are arc still sUll some of the 'green green 'greens 'greengcs greengcs ' s " In circulation today toay ( ] , and na nafli 1 bank notes now make up about abouter abouter abouter er cent of our currency lurrency currencyie lurrencye currencye ie e latter step Uep had the double ad adge adge adSige ge of selling selllng more war bonds andIng andlag and andIng Ing lag the currency . It may easily easilyeen easilyeen easilyeen een that unlfJ unifying unlf3ing Ing the curr currency currencyng < > ncy , ng rig bank b'lnk blnk ' notes the same value valueghout valueghout valueighout ghout the na nation tIon , was actually u a ustep astep aStep [ step In unification of or the country ! , at a time when the Union was wastat wastal wastal tat tal need of at hanging togetherore togetherore together togetherfore fore ore Issuing national bank notes notesI , had bad to delh deliver deliser er to the comptroller comptrollere e currency collateral In the tile torm form tormeral formeral formderal ; eral bonds bons ( ] which they had albought albought al- al albought - - ' bought , , and which wero were deslgElmcr desigd desigft deslg- deslg desig- desig deslgNj - " - - , - d ft A Adt ) dt s sFT FT / . , / Nj " * ? ' Kyfy 7 fy/ fy . \ Ky- Ky - fyy / < ' y- y - i yi T X ' ' ' X < , ' X XSfe Sfe . ) 1 o LS : : L LSenator S Senator Elmer Elmcr TliomaF Thomar Thoma ; . , 4 ! privll " 4having having the circulation prlvle privl- privl prlvl- prlvl - l privlghe ghe e a comptroller then Issued to tonatIonal toK y toy thet national bank b'lnk blnk ' note note's notes ' up to the thee thef thea thee t ' f | e a of ot the bonds In C1 case . , > e of talle fall tall fallthe is'tct istct fallis'tct , , , wouldhe e a bank the government would wouldI I lull the he notes out of ot the bonds de- de - - - by dc-by dc by deby the bank Hie Tlie he IE Issuing lesuing , > uIng of ofs ofi ofs s \ was as , . , In to effect effect . , i I $ ( circulation Irculatlou ofOnds ot of otonds ot otrued onds . . 0 0as as a profitable busIness for the theor Intereste VLF theVLF VLFor or In addition to t the e Interest Interestcd [ e rued cd ed ou on national nation'll nationll nntionil ' bank notes notesut notesto notes'ut notesut ' ut or 1n 1m invested csted tested to , , they also re ale/I ale I realeI / aa aagii , terest reterest ( presto on the bonds deposited depositedl " * ' l gii giio n6 giin6 n6e0 e0 o 1 - with the Treasury Treacury ; dopaitmont depaitnient dep11 tmellt . , In the thecase thecase thecase case of ot the tile bonds now no\\ no no's nos noto \ ' \ to be retired retiredthe , . the Interest was 2 per cent . . Until July 22 , 1012 19'12 1912 19 ' 2 , , the only bonds bondswIth bondswith bondswith wIth the circulation prh privilege lI'gc lIgc ( ' were werethose werethose werethose those about to be retired Au August ust 1 On Onthat Onthat Onthat that date d'lte dlte dite ' a provision proIslon prosision , of the r'ederal rederal ederal r'ederalHome I ' FederalHome ederalHome Home loan roan r O'ln Oln ' Bank B'lnk Blnk l3ink ' act nct allowed other otherbonds otherbonds otherbonds bonds , totaling approximately appro\.lmately appro.lmately appro .lmately lmately ' \ . $150 150 $150-000000 $150 150 000000 $ , ; , - 000000 , the circulation privilege prhllege until untilJuly untilJuly untilJuly July 22 , 1935 1035 Quoting directly from fromthe fromthe fromthe the report of th the ( ' treasury tre1sury : : Retires the Bends"At Bonds"At Bonds Bends Bonds"At "At At " that time the banks banl.s banls . with cIrcu circa cIrcuIatlng circalating circulating Iatlng lating notes outstanding under this thistemporarJ thistemporar3 thtetemporary temporarJ temporar3 authorization will have to toreplace toreplace , replale replace the bonds , now sen serving Ing as seV sc se scHenry ' V Q , 4 4y . y dt5 1 1r 1S r S Y YHenry Henry Morgenthau , Jr , . Secretary of ofthe ofthe ofthe the Treasury . curity curlty , with lawful 1'1wful 11wful ' money to retire retiretheIr retiretheir retiretheir theIr outstanding notes thus secured " It follows then . , that retiring national nationalbank nationalbank nationalbank bank notes Is Ic ; , , In reality re'lUty relUty ' , , retiring the thebomls thebonds thebonds bomls bonds which secure themA themA them themA A little 0 over ' er a year ago the federal federalgovernment federalgovernment federalgovernment government decided to re\ re revalue reulue resalue \ ulue the thedollar thedollar thedollar dollar . Under the Gold Reserve act of ofJanuary ofJanuary ofJanuary January 31 , 1934 1034 , the Treasury depart departDJent departwent department DJent went acquired all the gold In the tbe UOIt Unit UOIted United United ed State Stated Staten This met'llliS metal met'll metll ' \ was \\liS liS then sald ' \ val valued ai- ai aiued - ued at $20 20 $2067 2067 $ G7 an ounce The go gosern gosernment governroent , ern ernment ment re rev res , ' alucd 'llucd llucd clued It at $ $35 35 $ an ounce . . Thus Thusthere , there was still sUll the same amount of ofgold ofgold ofgold gold In the country , . but there were weremore weremore weremore more dollars dolhrs for a given amount ot of otgold ofgold ofgold ofgoldIn gold goldIn In process of revaluln revaluing gold-and gold and ; : gold old-and old and - and In Inthat inthat Inthat that way revaluing rc\aJulng rc aJulng \ the dollar at at59 $960 960 $ 59 CO GO cents In gold-the gold the gold - the nation real real- realIzed realized realized - ized a technical techniC'll techniCll ' profit of $2812,000,000 2812000000 $2812,000,000Two $2 2 $ 812,000,000 812000000 812,000,000Two 812,000,000Two 812000000Two , , Two billion dollars doHars was placed In the thestabl1lzatlon thestabilization thestabilization stabl1lzatlon stabilization fund tund , and out of tlie the re- re remaInder re- re remainder re remainder - - mainder congress congrcss appropriated $139- $139 139 $130- $130 130 $139000000 $130000 $139-000000 $139 139 000000 $ , - 000000 000 000 to the ' Federal r'ederal rederal Reserve Rpser\"e Rpser "e e \ " b'lnhs blnhs banks b'lnhsfor banksfor banksfor ' for loans to Industry ; of this total , $13 13 $13- $13 13 $13OOooO $13-500,000 $13 13 500,000 500000 $ ; , - 500,000 500000 OOooO , has been used for the purpose purposeAn purposeAn purposeAn An indefinite sum was W'lS WlS ' appropriated by bycongress bycongress bycongress congress for the melting of gold coins coinseCltlmated coinsestimated coinsestimated eCltlmated estimated at $8000000 8000000 $ , . and another another$23000000 another23000000 $23000000 23000000 $ 23 000 000 000was was appropriated for the thePhUlpplne thePhilippine thePhilippine PhUlpplne Philippine currency fund leaving lewlng $042- $042 042 $042000000 $ G42 G42-000000 G42 000000 , - ' 000 000000 000 This will be used to retire retiresome retiresome retiresome some of ot the national debt . . The differ difference difference difference ence between the 5642000000 $642000000 642000000 $ ' G42 000 000 and the the$675000,000 the675000000 $075000,000 075000000 $ , necessary necessarv to retire thebonds the thebonds thebonds bonds will be made m1de up out of a n specJfil special specJfiltreasury specialtreasury specialtreasury treasury fund . , It Is belle.ed'lbe believedThe believed belle.ed belleed . | ' Ibe 'lbe lbe The bonds \ which hlch \ will III be retired In Inthe inthe Inthe the move mo.e moe . are the 2 per cent con consols- consols consols"consolidated consols consols"consolidated sols- sols sols"consolldated - - "consolidated consolidated "consolldated consolldated " refunding bonds-of bonds of bonds " - - of1930 1030 1930 . , which have ha , e been called for tor re- re redemptIon redemption re redemption - - demption July 1 , and the 2 per cent centPanama centPanama centPanama Panama Canal loan 10'ln 10ln ' bonds of lOI6-193G lOI6 193G 1916.1936 19161936 lOI6193Gnnd 1916.1936and 1916-1936nnd 1916 1936nnd - . - nnd and 1918 1D18 1018 1938 1038 , which have been calledfor calledfor called | for redemption August 1 The tormer former tormerIs formerIssue formerissue Is Issue , > ue totals tot'lls totlls ' $599.724 599.724 599724 $5DI,724 5DI724 $599,724 $ ) . , 050 and the latter latter$74 latter74 $74901 74901 $74 74 $ 901 580 E Ev Es , en the retirement ot of otthis ofthis ofthis this sizeable total represents only a asmall asmall asmall small fraction of ot the public publle debt whIch whichIn , In mid March , stood at nt $285'i4 $28 28 $ 5'54 554 il- il 5'i4 5i4 il642 [ ' ) ' - ! 642 825 325 , las as compared with $20052 20052 $26 26 $ 052 5 598 S 596 GOO 500 a 11 year yearearlier yearearlier yearearlier yearearlierBased earlier earlierBased earlierBased I earlierI Based on "Gold Gold " Profit " ' The treasury will wlll retire the bonds by [ byIssulnj bylssuln byIssuln lssuln Issuln ; , gold certificates certificate ' ! , based on the thegold thegold |