Carolina watchman. [volume] (Salisbury, N.C.) 1871-1937, 1933-11-03

Washington - The announce
menr by the President of a fixed
policy of Governmental control of
the dollar in international trade has
brought great satisfaction to the
more statesman-like among his ad-
visers and friends, who have long
been convinced that no program
CT domestic recovery could be car
ried on successfully unless world
prices and world currency condi-
tions were taken into considera-
ton.
1t is one thing to talk of raising
the prices of commodities in our
home markets, and quite another
thing to raise those prices when they
are dependent upon selling our
commodities abroad. And in the
case of the principal agricultural
commodities, a large part of our
production must be sold abroad.
Half of our cotton, a third of our
wheat, nearly half of our corn, in
the shape of lard and hog products,
and an even greater proportion of
some other farm prducts must find
their market in Europe, Asia and
South America. And so long as
the dollar was maintained at the
old gold value, while all other ma
tons were depreciating the gold
values of their own moneys, the
prices ct our goods tended to get
lower in terms of dollars, higher in
other %currenties.
Dollars and Prices
We had a little taste of what
these international prices meant,
last Spring, when the President de-
clared an embargo en- gold. I'm
mdiately the dollar began to drop
in terms of the pound and other
foreign money, and world prices
and our domestic prices-of wheat,
cotton and other products went up
n terms of dollars. And when
ever, since then, the dollar has risen
have dropped.
1t is easy to ask why the dollar
has not found its natural level in
foreign trade, but the answer, not
yet fully understood by some con
servative financiers, is that it is
not to the interest of Great Britain
to let this country gain any advan-
tage in foreign trade and the gov
eminent of England has seen to it
that whenever the dollar began to
drop a point below that Of the
pound sterling, steps were taken tc
send the price of the dollar up
again. This has been done by
means of the sterling equalization
fund, operating in the world money
markets, managed by the Bank Of
England in collaboration with the
British Treasury. Whenever the
dollar gets too high to suit the
British interests, the equalization
fund goes into the world markets
and bids it up.
Our More Now
So far nothing has been done by
the United States to offset this.
But Mr.. Roosevelt's announcement
that the Federal government will
establish its own free gold market.
coupled with the declaration of
policy to operate in the world gold
market and So take the first steF
toward a managed currency:
amounts in effect to the establish
ment of a dollar equalization fund
to counterfeit the effects of the
sterling equalization fund. And
we have the advantage of having
a lot more gold of our own to play
with.
1t has now become quite clea1
that gold hereafter will be used only
as a measure of value in interna-
tional trade. 1t also has become
quite clear that ultimately the dol
lar will Be given a new value ir
terms Of gold. Mr.. Roosevelt made
that a definite proncuncement, Oh
what amounts to that, when he sale
that the dollar will be eventually
stabilized whenever commodity
prices reach the proper level. The
present commodity prices are only
about 70 percent of what the Ad-
m~inistration regards as the prope,
normal level. With foreign trade
prices under control, by means Of
cheapened dollars.it will be fairly
easy to raise domestic prices, since
they will no longer be disturbed
violently by attacks upon the dollar
from other nations. And when tht
100 percent of normal level price.
has been reached, then Mr.. Roose-
welt, promises, and not before, the
new value of the dollar will be fix
cd obviously at Whatever relation