President Roosevelt's Dilemma Once again financial circles in the United
States are deeply disturbed by new fears of monetary inflation, having their origin in the recent order for the nationaliza. tion of silver, and increased by the belief that heavy relief expenditure which cannot be financed by any normal means will be incurred by the Government. Certainly the Treasury has equipped itself with an instrument by which it might resort to inflation if it desired or were driven to do so. But the Secretary of the Treasury has most emphatically stated that that is not the intention, and that silver certificates will only be issued against silver recently acquired to the extent of the actual price paid for it. The loss of confidence that would arise from a pronounced inflationary policy would not only make it difficult for the Treasury to carry through certain re-financing programmes necessary in the near future to meet various federal obligations, but would also make it more difficult than ever to finance huge federal relief schemes by loans. On the other hand, should the President exhaust the capacity to raise loans, he might have to choose between restricting public works and resorting to inflation.
Previous page
