Federal Government to Benefit from Inflation Washington, June. 5.
With the signing to-day, by President Roosevelt, of the bill repealing the gold standard acts, a prolonged period of inflation on its present basis was considered to be assured. During this period, the Federal Government, which is the largest debtor within the boundaries of the United States, will derive the greatest benefits.
The bill signed toxtay does not increase nor decrease the inflationary process but it prevents a return to. gold at least until next year unless" Congress is called" in special session.
The dollar has already decreased in relation to commodities and the Administration, which sponsored the hi, hopes it Will be easier for the citizen as well as the Government to Pay debts.
Owing $21.441,209,177 to holders ts bonds, the Federal Government expected to have its debt burden eased along with farmers and homeowners who have large mortgages on their properties wr benefit would be felt by. states, cities and municipalities, which owe approxi-
Because it owes more money than anyone else, the Federal Government is expected to gain most and improves. its revenues will increase as business
'A part of this advantage is lost however, because the Government is
extent of $11,000,000,000 on account Aredia of foreign nations fo the fof the war debts which, if paid, will cheap money.
Inflationary programmes generally depress the market for high-grade bonds, but the current inflationary programme places a: safeguard on the Government bond market, Under terms of the inflation bill which preceded the repeal bill, Fed Jeral Reserve banks are authorised be {to make purchases up to $3,000,000, 000. in Government bonds, These purchases would keep the Govern. ment bond market on an even level Jdespite a. declining dollar.
Another safeguard is the privilege given the President to order the is-'Suance of $3,000,000,000 in, United States notes for the purchase of Government bonds.
Government financial authorities are sanguine over prospects of the future. government's finances in the near
The Federal Government, since the banking holiday, has refunded more than a thousand million dollars of its maturing debt—United Press,
Text read from the printed page and cleaned; old type leaves the occasional error.