Stabilization of the Dollar

Report Outline
Price Raising Program of Roosevelt Administration
Stabilization of Purchasing Power of Dollar
Stabilization of Exchange Value of the Dollar
Special Focus

Price Raising Program of Roosevelt Administration

Under present conditions, with the United States off the gold standard both internally and externally, “stabilization of the dollar” has two aspects: (1) Stabilization of the purchasing power of the dollar in the domestic market, and (2) stabilization of the exchange value of the dollar in terms of foreign currencies. Ultimately the administration at Washington will give attention to both aspects of the problem, but for the present its effort is being directed principally to a restoration of the 1926 level of commodity prices in the United States as a condition precedent to stabilization.

President Roosevelt said in his radio address of May 7, 1933:

The administration has the definite objective of raising commodity prices to such an extent that those who have borrowed money will, on the average, he able to repay that money in the same kind of dollars which they borrowed. In other words, we seek to correct a wrong and not to create a wrong in the opposite direction. That is why powers are being given to the administration to provide, if necessary, for an enlargement of credit, in order to correct the existing wrong. These powers will be used when, as, and if it may be necessary to accomplish the purpose.