Evening star., 1934-10-26
ROOSEVELT TALK
HELD RIGHT TURN
Bankers Disappointed Pres.
ident's Comments Were
Yelled, Cautious.
BY DAVID LAWRENCE.

tHe American bdHkcIo AScUNihbuh
didn't sound as we'll as it reads. Thi.
may account for the expressions oi
disappointment heard In the corridors
after Mr.. Roosevelt spoke.
But the real reason for the lack oi
enthusiasm is that the President de-
cided to couch his comments in yer!
cautious and restrained phrases.
The fact remains, however, thai
there are at least four important anc
vital declarations in Mr.. Roosevelt:
address which carry forward the turr
to the right which was manifested
IN his September 80 radio address
First, Mr.. Roosevelt, with a few
delicately chosen words, pronounced
himself in favor of world stabiliZatior
of currencies at as early date al
possible. Economists who are familiar
with the technical language of stabili-
yation discussions will recognize the
word "steadineSs" as synonym fol
stabilization and will observe the ref.
erence to "steadiness of prices anc
values" as being but another way tt
express the much-desired parity be.
tween the prices and values of one
nation and another-a situation tha'
always precedes stabilization Of the
monetary unit.
Wants Sterilization.
Mr.. Roosevelt might have said, &c
want to stabilize the dollar at thu
earliest possible moment. Prices hert
will some day reach a parity with
prices abroad and we can discus!
stabilization in earnest. Meanwhile
I have better information than yol
have as to when that point will bt
reached, because I am getting daily
as we'll as hourly data from all part.
of the world"
the word "steadiness" is substituted
for sterilization, the significance ol
the foregoing paraphraSe becomes ap-
parent.
Second, Mr.. Roosevelt might have
made better impression, of course, II
he had said II want to balance the
budget as quickly as possible, but
can't do it now" He chose, instead
to say that large expenditures for re-
lief of unemployment should proceed
''in the expectation that a revival OF
business will steadily reduce this bur-
den" But he did thus indicate his
belief in the ultimate reduction OF
public expenses.
To Aid Private Business.
Third, the emphatic statement that
the Government is bending every ef-
fort through its various agencies-ano
he mentioned the Securities and Ex-
change Commission as well as the r
r. C-to facilitate and encourage the
revival OF private investment" This
is but another way OF promising thai
the restrictive and negative policies oi
some of the Government agencies will
be supplanted by affirmative and help
full policies looking toward an early
reopening Of capital markets.
It will be noted that the President
rather generally, to be sure, but none
the less indelibly, put his stamp Of ap'
proval on the velocity theory Of money
rather than the inflationist doctrine
Of quantity when he said:
The present steady and unmis
taxable revival Of public demand TO
goods and services should provide thu
assurance necessary to the financing
Of industrial life
This situation has hardly ma
terialized as yet, but 1t is significan
that Mr. Roosevelt defends the ides
which so many orthodox economist.
have always espoused, namely that, a
demand for goods increases, there |;
a substantial increase in money turn
over and that we have no lack of 1
circulating medium. but lack Of job!
for the currency to do-a lack o.
volume of business transactions.
Fourth, and this perhaps may b
regarded as. the most satisfactory o.
all the assurances or pledges which
we're implied or given directly IN the
Presidents speech-a promise to hav'
the Government retire from the lend
ing business when the emergency /:
over.
Bankers SkepticaL
1t might be said, of course, that tn,
administration never intended to en-
croach on private banking or to Sc
up permanently any competitive in
stitutions, but the bankers have beer
skeptical about the trend of Govern
ment to centralize control over bank
ing and credit. Hence the assuranc,
of the Presidents intention will makl
a profound impression when its mean
ing is thoroughly studied. Here is tn,
commitment which Mr.. Roosevelt
gave:
IT find almost general agreement
among bankers that these agencies
must continue until such time as th'
banks and other private credit agen
cies are themselves able and ready h
take over these lending functions.
And when that time comes shall
be only too glad to curtail the activi
ties of these public agencies in pro
portion to the taking up Of the slacl
by the privately owned agencies"
Certainly, these four points NOR
than overshadow the lack Of Specifi,
answers by the President to the bank
ers on such broad subjects as infla'
ton, central banking and q balanced
pu0SCt6Iy Ddb, Ohi ehA'
theory that Mr.. Roosevelt is reccgniZ
ing some Of the protests from tht
banking and business world and be-
ginning to turn away from some o.
the earlier experiments Of his admin
istration, the address represents q GER
tain degree Of progress
The bankers showed every willing
ness to cooperate Jackson Reynolds
of New York, in the only speech mad'
In Mr.. Roosevelt's presence, Offered
the olive branch. The President nevel
referred to the address at all, which
Is something the bankers didn't like
But, all in all, it may be said the visit
of the bankers to Washington gave
the Government a clearer idea of it,
problem and perhaps the bankers tool
home clearer idea Of their problem
too.
(copyright. 1934)