Evening star., 1933-06-11
ROOSEVELT'S INITIATION
COURSE STILL UNCERTAIN
Review of Last Three Months Indicates
He Hopes to Avoid Use of
Drastic Methods.

and the average prices Of goods at q
point where debtors can meet their OBJ
legations comfortably, and people nor
mally prosperous and happy
There is, of course, NO such thing as
a complete going back to that period.
inere Is never at any time any such
tnlng as complete going back to the
past. Some of the evolution going on
IN America, perfectly natural and COM
pietely inevitable, may arrive at funda-
mental changes. 1t may be, for ex-
ample. that there will be tendency for
INDUSTRY to diffuse itself, going in the
direction OF smaller communities. Res.
torat1on of rural and village life is one
OF Mr.. Roosevelt's ideals. Neither that.
however, nor any other detail of his
program. nor his program as a whole,
contemplates fundamental change in
the American social system.
Reasons for a Momentous Decision.
An attempt to summarize, very
briefly. what President Roosevelt has
done so far-not in detail but merely.
the broad current-would begin by saw
ing ne started out with the firm inten-
tion OF keeping America on the gold
OASIS and the value of the currency un-
impaired; OF adhering as completely 10
the Democratic platform pledge. "a
sound currency to be preserved at all
hazards" as to the platforms other
pledges.
To carry out the platform pledges.
10 carry out all Of them, to make almost
spectacular record of fidelity to party
pledges was clearly, during those early
weeks. conscious aspiration in which
tne PRESIDENT took pleasure. To quesp
LIONS asked him during the early weeks
about the meaning of some nroposaj
from him or concerning a step be was
ABOUT TO take, and just how far it would
20, ms frequent answer was, read the
democratic platform"
Sought Balanced Budget
This intention about the gold stand
ara and currency continued for at
ieaSt nve weeks. His early measures
curing this period contemplated rigid
balancing of the budget so that the
nscal integrity of the Government
confidence In the Governments bonds
ana ltS currency, should be completely
restored and maintained. (Tncidentai-
~, determination to balance the BUDGET
IN the sense Of keeping routine ex-
penses lower than income continues
unlmpalred) The first act he asked
CONGRESS to pass looking to enormous
reductions in Government expenditure
reductions literally almost incretihle
could only have been consistent with
purpose opposite to imitation. Il use
tnlS word here In its familiar. inclusivk
senseD Obviously, there would be. little
point In cutting, for example, rs per
cent or more OF the COMPENSATION of
veterans or another percentage on tbe'
pay OF Government employees. II at the
time this was done there was anv in
tention subsequently, to have an infia-
tion amounting to the same per-
centage or more.
Otner early measures looked to IA
clntating compromise of private debts
ana scaling down Of them so as t.
bring them to point where tt1ey couid
pc comfortably paid without infIaticr,-
pnere would have been, for example.
no point IN the measures for reducing
oepts on farms and homes and the
interest on them II at the same time
There mad been an intention suhse-
quently to reduce the value of the
collar or otherwise to bring about In
Funds Tied Up in Banks.
This early program went ON until
about the middle of April What han
pended then was coincidence of three
conditions. sS
First. it was realized, with surprise.
am confident, that the deflation OF
.ne preceomg three years was still
uaaer M way, and at a pace faster than
ever before. The President. two davs
aIter he took Office, had closed all the
oanks. A week later he had opened
most OF them. But those that were
kept closed contained about a fifth of
all the country's bank deposits. some
seven or eight billion dollars. This
amounted 70 a new Spasm of deflatfon.
drastic Strangulation of business
greater than any that had happened
peIore: The total freezing of bank
deposits during the whole Depression
nad been only about fifteen billion dol
About the middle of AuriI IL wa.
realized that this new spasm of de-
nation was producing its familiar re-
suits. Among them Unemployment was
increasing. And to stop unemploy-
ment, to halt deflation. was a neces-
Sity that seemed to justify almost any-
tnlng. As Mr.. Roosevelt put it. ssthe
country was dying by inches"
ABOUT the same time it was realized
tnat Britain's being of the gold baSis
was giving her great trade adyan-
tage over America remaining on the
goid basis. And at the same time
there was in the Senate a vote on in
nation In the crudest form, free COIN
age OF silver in the Bryan ratio of 16
to l.. In that vote a majority of the
Democratic Senator's voted for infla-
ton. 1t was plain the imitation serti-
ment In Congress was extremely strong.
AND 1t had already been plain that
continued defation made imitation
sentiment in the country strong.
Fiscal Course Uncertain.
1t was at that point, and, think.
under the impulse of these three con-
ditions coinciding, that Mr.. Roosevelt
took the dollar off the gold basis and
compromised with the inflationists In
Congress by having Congress give him
power at his discretion to initiate
eitner credit or currency, or both, by
an the ways OF initiating that there
are. In the haste and under the pres
sure in which the decision had to be
made. there may have been some con-
fusion. About the wisdom of the step
there Will be controversy for genera
tions to come. About the present effi-
cacy OF 1t as one means of achieving
better conditions of business and q
more cheerful and normal national
spirit, there can be no doubt the mass
VI the people approve.
What Mr.. Roosevelt will do with his
power of imitation remains to be seen.
He has already started imitation of
credit, but to that no one objects. He
has not yet inflated currency; he has
not used greenbacks, nor done any
thing about silver, nor reduced the
quantity of gold in the dollar. Whether
he will do any of these and how much
remains to be seen.
1t is fair guess that Mr.. Roosevelt
would much prefer to have the coun-
try recover without use of any of his
powers of currency imitation. And that
in all respects he would prefer to get
the country back to what Is familiar
and normal with only such changes as
the course OF nature make unacceptable.
Al. r. W