Show S Suggests Change in Our Gold sold Policy To Help che Check k Spiral of Inflation Every supporting supporting self man and woman In the nation Is disturbed over th speed of the inflationary spiral which is u making the j conduct of busI bus bus- 2 I nets n es more m 0 r e erisky risky a and n d the pP desire to live if frug frugally lly Impossible impossible sible Bible of ot lion tion Many analyses ses sel have been f hone on H M mad made e o 0 of f the nations nation's s t r o 0 u bled blea monetary and economic situation sit sit- by well known leaders Inmany in inmany inmany many fields field The latest such an analysis analysis an- an and recommendations for jor curative steps comes from Francis Francisn II n Brownell l long ng a top official of ci the American Smelting and andr r Refining Company I Mr Brownell's lifelong interest in n and study of monetary problems probe lems and his never ceasing support support sup sup- port porI of a hard money system give added weight to his opinions and recommendations According to Mr Brownell who has just set forth his views end recommendations in an open letter Jetter which he recently wrote to Senator Charles W Tobey and Congressman Jesse P. P Wolcott respective Chairmen of ot the Com Com- on B flanking Banking and Currency in the Senate and the House our heavy gold purchases have pave a di- di i reel reet inflationary effect upon our economy In his letter this highly and widely respected monetary au authority authority au- au explains that this relationship relationship rela rela- comes from the fact tact that our Government after the purchase purchase purchase pur pur- pur- pur chase proceeds to store the physical physical physical cal gold In the Treasury and then I Ito to turn it into bank credit money It also increases by this amount amoun t bank credit r reserves e s 8 e r i V e s 8 which makes possible increases of bank ban k credit through loans or discounts is to the extent of ot five t times nes such reserve Thus the 1947 gold lold purchases pur pur- purchases I I chases served as the basis for in increasing increasing increasing in- in creasing bank credit billion 10 which plus pius the original billion 2 makes a total of 12 billion or a possible Increase of f bank credit money of 6 for each Slot 1 of gold On this point another monetary authority Mr Eccles Chairman of the Federal Reserve Reserve- Reserve Board Board ex expressed expressed ex- ex pressed Sed the belief on November 25 25 1947 1047 that the inflow of bf f gold goldin in in 1948 would be between 2 and 3 billion dollars and then added Multiplied by six this would permit an expansion of bank credit of ot from 12 to 18 billion dol dol- lars Such an Inflow would mean meana a greater expansion of credit more easy money and consequent inflationary trend toward higher prices for everything you buy Mr Brownell's letter makes clearly understandable how our ownership today of 60 of the worlds world's monetary gold and our continued heavy purchases of monetary gold stocks serves di directly directly directly di- di to speed up the inflationary spiral at home while it serves to Increase the dollar stringency abroad He believes that the way to cure these ills is to 1 Rescind the prohibition of ownership of gold by United States citizens 2 Permit a free market both bothIn In the United States and elsewhere elsewhere elsewhere else else- where for all gold including United States mine production and 3 Leave the present gold policy otherwise unchanged continuing continuing con the obligation of the Treasury to buy gold offered at 35 per ounce Some opposition he be says may arise to fo the adoption of the program program program pro pro- gram he recommends but bu buin k in in his opinion it is is much more important important important im im- im- im to stop the present Inflationary inflationary inflationary effect by reducing purchase purchases pur pur- chases chase than to continue to follow the course which can lead to social social so so- cial and economic disaster |