The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-04-22
CONTROLLED INITIATION

- another way an imitation which restored a
reasonable price level, achieved just balance
between debtors and creditors, and put us on
fair trade basis in relation to the rest of the
world would be the road to economic health.
But uncontrolled imitation, which de-
preciated the currency without provision for
breaks or bottom-as in the case of the old
German mark-Would be the road to suicide
OF course, every inflationist denies that his
particular brand is of the uncomfortable va
riety. And every last-ditch defationist insists
that all brands of imitation are uncomfortable.
Neither extremist can be very helpful to the
country at this time of crisis.
The figure used at the White House is apt
1t was said that the President was clear as
to his goal but that he could no more fix
all his plans in advance than football quar-
ter back could call all his plays in advance
A general has an objective, but he never
will reach the objective unless he is able to
shift tactics and mature strategy as his line
crumbes or advances.
Some months ago Mr. Roosevelt, along with
most Americans, was opposed to currency in
fation. That he now moves quickly toward
controlled imitation, under pressure of domestic
and foreign developments which could not be
foreseen last winter, shows that Mr.. Roosevelt
is not fettered by the rigidity of mind which
was so disastrous to the country under the
Hoover administration.
BY acting quickly when the monetary crisis
occurred, Mr.. Roosevelt, far from pIunging us
into uncontrolled imitation, has taken the one
course most likely to save us from printing
press money.
Insofar as a government can embark on
necessary relation, and at the same time
throw up barriers to prevent it from running
wild, the President is providing controls for
imitation.
One thing conducive to uncontrolled infla-
ton is gold shortage The President has pre-
vented that BY suspending gold payments
and exports Immediately on taking office, and
by Tightening that embargo policy this week.
he stopped the drain of gold before it began
Today we have all the gold we need; in
deed, many economists think we have too
much. The gold holdings of the federal re-
serve system now total SO, 1865 900 900, the Iarg-
est amount with one brief exception of any re-
serve ever held by our banks Of ISSUE
The nations monetary gold stock has
reached the enormous figure of $685. 600 900
out of the world total of $11, 100000.
Another thing which forces imitation to
run wild, once it gets started, is an I'M
balanced government budget. Like a narcotic
victim the government resorts to more and
more paper money to meet its operating de-
f1cit. until the money becomes virtually worth
less.
But, before embarking on even the mildest
imitation, the President arranged to eliminate
one billion dollars Of government operating
expenses. With the operating budget in ap-
proximate balance no shortage will tempt the
printing presses and undermine the govern
ment's determination to keep its money sound.
But the President has done more than
avoid the dangers of a gold shortage and an
unbalanced operating budget
BY asking congress to give him discretion
airy power to employ certain carefully re-
strained types of currency imitation if and
when needed, he probably has headed off in
congress a 16-to-1 silver law or another ex-
IRENE form of imitation.
Not only does the Roosevelt imitation bill
provide definite limits of expansion, but it
has the added advantage of being highly
flexible.
Reverting to the White Houses football
analogy this fexibility will allow the quar-
ter back to adapt his strategy as the situation
changes.
Just as there are no absolute certainties in
life, there is none in monetary policy. But
we know that blind retention of the old gold
standard under the circumstances created an
artificial and unjust debt and price level.
Relation is necessary to create an honest
dollar, so essential for business revival. The
Presidents purpose is to get back to that
honest dollar.
There always is the danger that we shall
swing from one extreme to the other, from the
dishonesty dear dollar of dehation to the
dishonesty cheap dollar of extreme imitation.
But the Roosevelt policy should protect US
from the dangers of both deflation and ex-
IRENE imitation.