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Letter on Monetary Policy.

May 20, 1937

My dear Senator:

I am in receipt of your letter of the 14th and have been giving it my close attention. I am very grateful to you for the watchful interest you have maintained in the trend of monetary policy and events and always welcome any suggestions you have to make.

I am in complete sympathy with your objective with respect to the elimination of unnecessary fluctuations in the value of the dollar. The United States is still seeking "the kind of dollar which a generation hence will have the same purchasing and debt-paying power as the dollar value we hope to attain in the near future." I am sure that you also agree with me that stabilization of the value of the dollar will be attained not merely by monetary means and devices—though these are necessary—but much more by the achievement of balanced and orderly recovery throughout the whole economy, and by its maintenance once achieved. However, in view of the complexity of the rapidly shifting international scene at present it would be dangerous to adjust ourselves to any rigid pattern. It is doubtful whether procedure on the lines you suggest will be rewarded with that measure of success which we could justly expect were the international situation to have undergone clarification. For this reason I believe that to commit ourselves definitively at this time to a formalized course of action might well be premature and might therefore even do more harm than good, both at home and abroad.

You may rest assured that we are watching all developments in the monetary sphere with a view to making any timely contribution we can. The monetary understanding reached last September first with England and France and then with a number of other countries was rightly interpreted as being a great step forward in the attainment of the external stability of the dollar as well as in the promotion of international economic cooperation.

Our common aims in the realm of monetary policy are set forth with admirable lucidity in a talk given by the Secretary of the Treasury, at Harvard, a few months ago. I am enclosing a copy for your convenience.

Thanking you for your continuing cooperation, I am

Sincerely yours,

The Honorable Elmer Thomas, United States Senate.

Franklin D. Roosevelt, Letter on Monetary Policy. Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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