Evening star., 1933-11-12
INITIATION TREND
TOWARD EXTREME
Dollar Stirred by Prospect of
Decline Like Francs Drop
Some Time Ago.
BY MARK SULLIVAN.

DIX MAhh SOLL1tANs
In Washington over the week end
and In New York there was sharp
fame OF increased belief that America
is going to have what is popularity un-
derstood by imitation"
What Is meant by imitation in this
dispatch is imitation of the rather ex-
treme type, which in France carried the
value of the franc from roughly 1s
cents down to roughly cents. later
stabilized at roughly 4 cents. An
American equivalent of the French IN
fiation would carry the dollar down to
about 20 cents The dollar has already
gone to about So cents. The question Is
whether America is likely to experience
anything like the French type and de-
gree of imitation.
On this point the present writer has
taken pains during the last few days
to get the cream of expert judgment in
New York and in Washington. A fair
summary would say that a considerable
amount Of opinion from the most
thoughtful and authoritative sources
believes America is moving strongly
toward imitation in the extreme sense.
Attitude of officials.
TO be clear it will be well to con-
slider first the attitude of those In the
Government who initiated our present
currency policy and are carrying it out.
President Roosevelt and Prof. Warren
fully intend to control the depressing
of the dollar and fully believe they can
do so. The administrator wish, pub
Is to depress the dollar down to point
not exactly defined, but well under
stood to be somewhat above so cents.
1f
The difference Of opinion Is on whether
the administration can check their de-
hberately depressing at the point they
have chosen, or whether the deliberate
depressing will pass into a phase of
precipitate. uncontrolled imitation kv-
ing as far perhaps as the French franc
An impressive number of the best au-
thorities believe that the latter will oc-
cur. They say that the forces set In
motion by what the administration has
already done, plus other forces not
within the administrators control in
cluding public psychology, will become
uncomfortable and will go to extreme
imitation.
All this, Of course, is judgment only
and cannot be anything more. The
present stage Of imitation is like the be-
ginning of a strong wind. Whether 1t
will go on to become gale is matter
Of opinion.
Reluctance Of Opinion.
Some of those best equipped to Judge
are hesitant to express their opinion
publicly. This hesitancy comes from q
reluctance to make statements which
may seem alarmist. Responsible per-
sons feel that merely to say there will be
extreme imitation has itself tendency
IN hrt,x OBJ xk~ I'D
1uctance to make alarmist statements
causes much public comment to be sub
dued, any many of the best authorities
to be silent.
One convincing evidence of the ex-
pectation Of imitation Is that many of
the best-informed men In finance and
business are arranging their affairs to
be as safe as possible II imitation comes
Large numbers are transferring capi-
tai to some countries in Europe or to
Canada, some are buying real estate.
Some are buying other commodities.
Some are buying shares In companies
having large inventories of commodities.
Many bankers and other custodians of
funds, not only in New York, but by
this time throughout the country, are
selling those forms Of security, mainly
bonds which would be at disadvan-
tage in case imitation comes. Evidence
OF this Is in the drop in price of the re-
Gently issued Treasury bonds. Issued
less than month ago, on october 81,
at price of 101.5, the quotation last
Friday was $3.50. Nobody doubts the
soundness of these bonds. Nobody
doubts that on every $1,000 bond the
Government will pay a thousand dol
lars. What is feared is that each dol
lar a year from now on may amount
to only 25 cents or less, that the dollar
which today will buy four pounds Of
coffee will year from now buy only
one.
Reversal Of Trend Seen.
What is said here would be incom-
plete and misleading without an ad-
ditional statement. Able and sure
footed persons in this field say first
that the present trend leads infallibly to
extreme imitation. But say second that
their net judgment is that extreme in
flation will not come The reason for
their qualification is to the effect that
President Roosevelt, when he Is con-
vnced that this outcome Is ahead, will
reverse this course. 1t Is true that re-
versal by the President would involve
abandonment Of several publicly and
emphatically proclaimed policies. Never
theless those who think this way say
that there need be no great embarrass-
Inent to the President In announcing
that these policies were experimental
and will be dropped when and If they
begin 10 point toward extreme imitation.
At present, all the evidence Is that the
President intends to go on with his
policies.
GOLD PROGRAM PUSHED.