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y v y 'Jx. jlU ' 25 February 23, 19^5 • llr. David A* Curry, I4UU East li|2d Street, Hew York 5k, Hew York. Dear Mr* Curry: This is to acknowledge your letter of February 20 in regard to the measure for reducing Hie gold reserve ratio to 25 per cent* I enclose a copy of a statement I made to the Committee which gives all the relevant facts. It should be borne in mind that this is merely a permissible minimum* We may never reach it* At various times in the past we have had 100 per cent gold cover, though the permissible gold minimum was only 1 0 per cent in regard to Federal Reserve notes* * Whatever gold or gold certificates there are will continue to be pledged as collateral, but, of course, nothing could be more ridiculous than to let some arbitrary and no longer important collateral requirement stand in the way of financing the war. This move would not affect one way or the other the stabilising influence on our currency and would not add one particle to inflation* Inflation is not prevented by any arbitrary gold reserve ratio behind the currency* We have had the I Q per cent ratio 4 for more than a quarter of a century and in that period we have had about as inflationary and deflationary swings as it would be possible to have* What causes the inflationary danger now is the way in which the Congress has proceeded in financing the war* The presence or absence of a reserve ratio does not have the remotest bearing on the matter* Sincerely yours. M. S* Eooles, Chairman. Enclosure