Evening star., 1933-12-09
STABILITY SIGNS
i'ELD EVIDENCED
Principal Reason for Delay Is
Believed Due to French
Situation.
BY DAVID LAWRENCE.

Klements Of stability are beginning to
appear in the administrations none.
tary policy. The stabilizing process
may be said to have begun.
But this does not mean revaluation
Of the gold content Of the dollar is near
at hand. On the contrary, the ad-
ministration Is feeling its way from
day to day and believes various cir
cumstances would make 1t unwise to
revalue at once.
The principal reason for delaying the
revaluation Is the uncertainty over the
French financial situation. It is, Of
course, stoutly denied here that Amer.
ica wants France OF the gold stand
ard. But it Is apparent that the un-
balanced budget at Paris Is causing
concern in Europe. The dow Of gold
to London has been the result Of fear
Of an eventual suspension of gold pay
ments in France. II, as q consequence
Of conditions arising wholly within the
borders Of France, 1t is apparent that
France is wavering, can it be argued
that America would be justified in un-
dertaking revaluation?
Would Like to Guess Right.
There is not the slightest support for
the recovery Of temporary devaluation
OF the dollar or for trying one devalua-
ton and then suggesting another later
on. The administration would like to
guess right the first time. What makes
dimcult any approximation of the ulti-
mate position Of the dollar is the large
amount Of capital that goes from one
country to the other on the slightest
rumor or report Of monetary activity
among the various governments of the
world. There was last week q flight Of
capital from France to England. There
has been flight from the United States
to Europe. In the last few days the
franc has steadied somewhat and has
even grown stronger. What makes it
doubly difhcult to understand the cur
rent tides Of money is that so much of
1t Is handled in the numerous ex-
changes Of q public and private char
acter. The statistics are not easily or
quickly gathered.
No Change in Seven Days.
For seven days there has been no
change in the price of gold offered by
the r. F. c. This means the Govern
ment's policy Is. for the moment best
suited to q stable base. Some have
thought that the Treasury refinancing
needed quieter atmosphere. Unques-
tionably the Morgenthau policy in offer
ing 2H per cent interest rate on one
year notes was a big success and was
the most reassuring step that could
have been taken to calm the fears OF
those who few weeks ago believed q
paper money panic was inevitable.
The most significant thing which the
weeks events proves Is that the Treas
ury does not believe in imitation under
MIR. Morgenthau any more than 1t did
under Mr.. Acheson. II the investors
who buy Government bonds are to be
persuaded to hold those they bought be-
fore and buy new issues, they must be
reassured. To the extent that a careful
manipulation Of the gold purchases in
dicates a desire not to upset the secur-
ity market, the Treasury has fallen in
line with the thinking of the capital
market. But this does not mean that
gold purchases will be discontinued.
1t does mean slight adjustments will
be made from time to time and that
we have decided to use the gold pur-
chase policy somewhat as an equaliza-
ton or stabilization fund.
Foreign Nations Patient.
The most remarkable fact is the pa
t1ence exhibited by England and
France, who took us at our word when
we said our policy was not aimed at
them. We have certainly toned down
our aggressiveness in gold buying and
Will surely not allow the dollar to
go to the 50-cent limit precipitately
We may even find that 60 cents Is a
comfortable bottom for a while.
There probably will not be revalua-
ton until much Of the American capi-
tai abroad finds a reasonable haven in
the United States for investment,
Conditions that will attract capital
to come back may grow out of renewed
industrial activity, revision of the Sc
curities act and q more active capital
market. But it is not to be expected
In few days or few weeks. 1t will
take time.
Meanwhile the Government will try
to hold the dollar down to its present
level and will constantly encounter nat
ural influences that will tend to force
the dollar up. The administration would
IKE to see readjustment of debt
further along before definite valuation
Of the dollar is determined. Inasmuch
as commodity or retail prices are not
rising rapidly and the public is not
looking at gold values but at domestic
dollar values. the experts feel that de-
valuation for all practical purposes Is
not something to be worried about in
tie ordinary transactions of life but
that that it does, of course, have a
bearing on long-term investments and
debt revision. The latter must neces-
sarily await the evolution of the Gov-
ernment,s monetary policy.