Evening star., 1933-12-04
ROOSEVELT AIMS
FOR RETALIATION
Men Behind Scenes Oppose
Printing-Press Money as
Much as Critics.
BY DAVID LAWRENCE.

If the men responsible for the oper-
ations of the Roosevelt gold policy were
to take the public into their conf
dence-which they say they cannot
what would they say in reply to cur
rent criticism and what would be their
forecast of what is going to happen?
First of all, they would express just
as much opposition to printing press
money as any Of the critics.
Next they would say stabilization is
just as desirable an objective from their
viewpoint as from that OF anybody else
who now looks askance at Government
policy
In view of this. what is the meaning
OF the Governments so-called expert
mentaliSm? The true answer Is that
cy that is intended to cover a strategy
of cautious approach to the final de-
valuation of the dollars gold content.
Purpose Is Retaliation.
The purpose of the administration is
to revalue the dollar. 1t will not SWerve
from that objective. Such a step could
not have been taken precipi. ately. Ex-
perience shows that in every country
where revaluation of the monetary unit
has Occurred-and it was fairly gen.
eral in Europe in 1925-the prejudices
against leaving the old par value were
so deeply rooted that all sorts of OBJ
stacles were encountered, some real and
some fanciful but resulting in serious
delays.
It is not often that a nation revalues
its currency, and because it means re-
pudiation of portion of debt there is
always hesitation on the part of con-
become nartieS
such repudiation. When once a gov
eminent takes the responsibility for
reputation as the lesser of two evils,
the alternative being held out as
disastrous def1ation and chaos. the
tendency of the people is to accept the
inevitable.
Seek TO Avoid Mistake.
Since we are in the muddle of the
devaluation process. the Roosevelt ad-
miniStratiOn, conscious that 1t will be
held to strict accountability. does not
wish to make a mistake as to the right
point at which revaluation Of the dol
lar should occur. To the cry of "un-
certainty" the administration has this
answer: Doesn't the law under which
the President is operating fix definitely
the limit of devaluation at so per cent?
OF course 1t does. SO a 50-cent dollar
IS the cheapest dollar in terms of gold
that We can have within the present
statute.
Two dangers confront the admins
tration. One is that as depreciation is
forced. people will lose confidence in
paper money. especially if the budget
remains out of balance and no formula
for ending the deficits is disclosed
The other is that the dollar will be
valued too low and that when American
capital comes back from Europe the
dollar will be quoted at premium in
foreign trade and our ability to sell
abroad will be hampered at a time
when we need more volume to aid US
in getting normal business to take over
some of the people who now are en-
gagged in public works or civilian
works" the new relief policies are
now known.
II, indeed, the wrong guess is made
on revaluation. uncertainty will con-
tinue, because investors will fear an
other revaluation to correct the first
mistake.
Support for Bond Market.
Considering all the circumstances
the administration would. Of course,
like a free hand to do two things
first. to continue buying gold till SAL
an ounce has been reached or as close
as possible to 1t: and. second, to have
business and finance keep its poise
while the revaluation point is ap-
proximated. Support for the bond
market is one policy determined upon
SO as to prevent panic or run on the
dollar inside the country. 1t is work
ing fairly well. Nerves are being
Steadied somewhat. especially as there
no signs as yet of any greenback
obligations.
Fortunately the rise In price level
sought by the Roosevelt policy will
nQt come at once, If it did it would
mean a paper money panic The price
level Will rise only when a sterilization
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