The Daily Alaska empire., 1933-11-22
Today and Tomorro,U
By WALTER LIPPMANN
In the Money Maze
Copyright, 1s3s New York Tribune Inc.

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 Commenting on what happened last week to government bonds and to the external value of the dollar, MT. Frederic Jenny, the financial editor of the Temps" writes that it proves that the human will is powerless to manage currency, and that in a volun- tary depreciation of the currency, one does not continue to be mas ter of it's evolution but that sOon- CT or later one is overcome by un- comfortable psychological reac- tions." We have begun to witness the psychological reactions, and though they are as yet by no means uncomfortable, they pointed last week in a direction that, if followed out, would mean very ser ious trouble.
 There were very clear signs that investors were be c o m g frightened, were selling govern ment bonds, and trying to convert their dollars into foreign curren- cies. Obviously, if this continued, if the price of government bonds fell, two very dangerous conse- quences would result: the banks which hold a very large part of these bonds as assets against de- posits would be in difficulties, and the government, which must sell huge quantities of bonds to fi- nance relief and public works and other items in the New Deal, would be stymied.
 A failure of the governments credit would, as the President has repeatedly pointed out be ser ious matter. Last week for a day or two, there was at least a tre- nor in the governments credit.
 
 The nervousness of the financial markets reflects the secrecy which covers the monetary operations now being conducted by the Ad- ministration. The policy has nev- CT been expounded. It is not un- derstood by the public. No one seems to know who is administer ing it. Each day there is the an- nouncement of new price for gold. But who determines that price, on what principle and by what calculation he determines 1t or precisely what he is trying to accomplish by it are mysteries. It is inevitable that rumor and suspicious should circulate when in matters of vital public interest there is official censorship and official silence.
 When men look to unofficial sources for light they find little to help them in forming clear opin- ion of what ought actually to be done. Thus MT. Edward H. Col lins. of the Herald Tribune, in the course of a very able dis cussion of the dangers of the pres ent policy, concludes by saying that whether a return to the 67-cent dollar is the best move from a sound money standpoint, or wheth- CT a return to gold should be at an early or distant date-these things, it seems to the present writer, are secondary, so far as the United States is concerned" ," MT. Collins is, no doubt, right in thinking that the gold content of the dollar can not now be deter mined exactly But firm public opinion is hardly likely to crystal ize around the confession that the sound-money advocates do not know where or when they wish to stabilize the dollar.
 At the other pole we have the decision of Senator Thomas of Colorado that there are many reasons for believing that our price of gold must go to double the statutory figure-that is must not stop short of $4134 an ounce" But what are those many req sons?" Senator Thomas does not disclose them.
 And so with the official policy enshrouded in mystery, the unof- ficial sound money view vague and inconclusive, and the unofficial heretic view dogmatic but mex plained, the ordinary man is like ly to say, this is big operation and I guess I am taking chloro- form.
 One does not, however, like to give up completely the effort to understand. And so we turn for light to the writings of Professor G. F. Warren and F. A. Pearson. They are reputed to have pro- vided basis of the present policy
 Fro mevery elaborate statisti- cal studies covering long period of time they have. as I under stand it, reached this conclusion I quote their own language:
 For seventy five years before the World War, world monetary stocks had to increase at the same rate as did the world physical