The Daily Alaska empire., 1933-11-01

| Sterllng the AQinullSJTdIlCH was running into serious difficulties. During the London Conference the President refused to stabilize the dollar by international agreement; | the manner of his refusal, involv- 1 ing as it did an apparent unWill- ingness to take any positive action even of a domestic character to control the dollar, brought about a wild speculation in commodities and currencies which collapsed in l the middle of July The world saw [ that we had a currency that was neither anchored to gold nor man. aged by anybody. The dollar had been turned over to international speculation.
 These conditions played a decis- i've part in the misdirection of en- ergy in the first phase of the N. R. A. and led us into the un- comfortable position we are now in agricultural and raw material i prices fell, as the uncontrolled ! dollar threatened to rise in terms of sterling and gold, prices of manufacturers rose under the pressure of the N. R. A. Our economy which, in the spring, had been tending to regain it's balance as the prices of raw materials rose and prices of finished goods stood still, was being thrown out of balance. The farm discontent was one symptom of the trouble; the anxiety of manufacturers, con- fronted with rising costs without adequate increase of volume, was the other symptom.
 
 About the manner in which con- trol of the dollar should be taken there have been and are wide dif- ferences of opinion. But ever here and there has been more agree ment than would have appeared from the ardent statements Of sinflationists" and "anti-inflation- ists." For it has been clear that a sudden return to the fixed gold standard and to a fixed rate of eX- change was impracticable. Nobody knows enough or could know enough to name the new gold content or the new party. They have to be discovered by trial and error. or, if you like, by adjust ment and experience. It followed that the next necessary step was to set up the machinery, similar to the British Equalization Fund by which the gold and the ex- change value of the dollar eoulc be manipulated and directed wltf a view to finding the most sat isfactory point. On this there nave been no serious differences O. opinion.
 Now the device which the Pres ident has adopted is, if l under | stand it, essentially an equlllza- tion fund. The govern m e n t through the R. F. c. is to buy and sell gold in the world market, as in substance the British have been doing, as the French did under Poincare, when they were working their way toward the stabillzation of the franc.
 Where the Presidents plan ap- pears to differ from the proceed ure of Britain and France is ln it's bold disclosure of the purpose he has in view. The British ano the French also had purposes; they did not announce them from the housetops. But M. Poincare deliberately chose a level for the franc which drastically relieved the burden of the French internal l debt. he could, had he chosen, have valued the franc higher than he did. He did not choose to do so. The British too have had a purpose. They have aimed to ! reduce the external value of the sterling and then to steady it. Being industrial eXporterers they have not wanted to raise their internal prices, but to reduce the cost of their exports in foreign markets. So we need not assume too excitedly that the United States is embarked on a policy the like of which was never known on land or sea.
 Nevertheless, it must be admit ted. that, though the device and the purposes are not nearly so strange as they look, the manner of the President in adopting them and announcing them may have important consequences. The Brit ish and French did what they did quickly, step by step, and in constant consultation with the fi- nancial markets Mir. Roosevelt has acted abruptly, and, it would seem. without taking the trouble to educate the markets so that they may know how to cooper ate with him. This may have the political virtue of demonstrating his dissertation from Wall Street. It has the practical disadvantage that it will make the necessary support of Wall Street more diff ficult to obtain, and furthermore, that it may produce speculative movements based on ignorance, eaar or hysteria, which would only