The Daily Alaska empire., 1933-11-27

The changes III llle lISdSuIy- Secretary Woodin's leave of ab- senca, Under Secretary Acheson's resignation, and Mr. Morgenthau's appointment to fill his place-are logical consequence of the inn portant decision announced in the Presidents radio address of Oc- tober p. The essence of that de- cision was the shaping of Amer ican monetary policy primarily in the interest of the agricultural interests affected by world mar kets. The decision was taken af- ter and almost certainly in re- sponse to, the appearance of grave discontent in the Mississippi and Missouri valleys. The principles of the new policy are those de- veloped by an agricultural econo- Professor Warren, of Cornell. The new acting Secretary of the Treasury, pupil of Professor Warren, is himself gentleman farmer interested for many years in the problems of agriculture.
 We have adopted an agrarian monetary policy and to that pol icy industry will apparently be compelled to adjust itself That this is an agrarian monetary pol icy is rather clearly indicated by the behavior of the Canadian and Australian currencies. These are agrarian currencies, that is to say, they are managed in the in- terest of the body of agricultural exporters. In terms of gold the Canadian dollar is Appreciated just about as much as the American dollar, the Australian pound sterl- ing somewhat more.
 Now why is it that the deprec- iation of the American dollar caus- es great concern in the industrial regions of the United States, while the equal depreciation of the Can- adian and Australian currencies is accepted almost without com ment? The reason, of course, is that agriculture is the predomi- nant interest in Cana1a and Aus tralia, and so an agrarian none tary policy is for them national policy. The United States, on the other hand, is a country half ag- rarian and half industrial; that is what makes monetary manage ment so much more difficult in the United States than it is in wholly industrial country like Eng land, or in a self-contalned ana well balanced country like France, or in the agricultural countries like Canada and Australia. In money as in the tariff we have to reconcile two great interests in the past we have on the whole favored the industrial interest in the matters. For the time being at least the tables have been turned.
 
 The objective of the present monetary policy will, of course, not be attained simple by lowering the external value of the dollar Ex- cept for a few crops which are ac- tually priced in international markets the depreciation of the dollar can have little effect until internal prices rise through cur rency and credit expansion. That this expansion will come, that the Administration will compel it to come. if it does not come through speculation and natural forces, now seems certain. There is no sense in the policy if that is not to be the result. The question then is not merely whether this imitation can be controlled in the sense of being stopped. It can un- doubtedly be stopped if the will to stop it exists. The real question is whether the rise of prices can be controlled under plan which will prevent prices that ought not to rise from rising. For if this is a general imitation rather than a true reflation the policy will cause as many new maladjust- ments as it cures old maladjust- ments.
 For example, the N. R. A. has devoted it's energies since last summer to increasing purchasing power by raising industrial wages. A general rise in prices will re- duce wages, a big rise in prices will cancel out this whole part of the N. R. A. policy. On the other hand. a rise in prices not accom- panied by an equivalent rise in wages will increase prifits, and so no doubt tend to stimulate busi- ness. But the big rise in prices will take away from the farmer at least part of what he gains by the imitation, since his costs ex- cept on his debts, will be rising.
 This is all very complicated. But it is not too soon to realize how complicated it is.
 
 The complication of the matter raises the question as to whether the Administration is adequately manned and properly organized to handle it. The departure of MT.