The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-04-28
FRIDAY. APRIL %. 1888.
WAITING FOR DEFLATION

w Al LINZ r OR DEF LAI1ON
+ TINE controlled initiation bill which the SEN
/, ate is expected to pass today gives the Pres
ident wide powers in fighting the depression.
BY necessity it represents a compromise of
several points of view. Apparently the Presi-
dent is not enthusiastic about all its provi-
sions; no more are we.
With the general purpose Of the bill there
can be no quarrel. Its aim is to restore prices,
stabilize international exchanges, and revive
an honest dollar. There are few persons who
would disagree with this aim
But some object to the methods set forth
in the bill Particularly there is opposition to
the free silver and new currency provisions.
These objections seem to be offset in large
part however, by the cardinal fact that all
provisions Of the bill are permissive rather
than mandatory. The President is not obliged
to use the more extreme inhationary provisions
at all, and is not likely to do so under any
save the most extreme circumstances.
If the bill before final enactment can be
improved in the direction of the adnlinistra-
TONS policy of controlled initiation. SO much
the better. If not, the bill should be made
law without too much delay.
Not an academic, but practical, situation
confronts us For better or worse the crisis
has reached the point where the country has
only two alternatives. Either we take some
such measure as the President has proposed,
or we take a doctrinnaire, cure-all, single
track and rigid law of the free silver or
greenback variety, at present sidetracked by
the Presidents bill.
The Presidents measure has the supreme
merit of elasticity. 1t gives the general the
guns and munitions kinds-and tells
him to use them as, when, and if, he needs
them. That is the way to win war And we
are in war now
The first gun the President is given, and
probably the most important, is credit infa-
ton. At the moment there is more currency
and currency expansion possible under exist
ing law than needed. The problem is to get
it into circulation.
The Presidents bill would make the federal
reserve more effective for this purpose, espe-
cially through open market operations. With
luck, this credit may be all that is needed
domestically.
The second gun is gold devaluation. Here
international. rather than domestic require
ments may force the use of a form of imitation
definitely controlled both by its nature and
by the specific limits written into the bill
Resumption of world trade, the levelng of
tariff and other barriers, war debt adjust
ment, and the whole effort to bring order out
of the international financial chaos, wait in
part upon the sterilization of monetary ex
changes on a gold standard.
Probably inability of Great Britain and
other of the so-called sterling group to stabilize
at the old gold standard without wrecking
their price levels will necessitate devalua-
ton of the dollar by us as part of general in
ternational sterilization of new and just
gold level
If applied temperately and wisely, this not
only would improve the world situation, which
is one major cause of our own depression. but
1t would help Americans to pay their debts
with dollars nearer the value of the dollars
they borrowed.
Instead OF going from an honest to dis
honest dollar as rabid deflationsts argue we
"OuIO' III AoN0' NC Sums AtNAlI OA0 PA00OA0 NA'
honestly dear dollar to an honest dollar.
If the President has power to use these two
guns of credit expansion and gold-along with
his other emergency measures for bank safety,
farm relief, public works and shorter hours
and minimum wage-the need for extreme
currency initiation probably never will arise.
But if uncontrolled initiation and its dangers
are to be escaped. we must start moving along
the road of controlled imitation soon. There
is not time for much more talk.