Evening star., 1934-10-12
LACK OF CLARITY
SEEN CONFUSING
Policies Interpreted as Con-
Trajectory Blamed on
White House.
BY DAVID LAWRENCE.

BY DAVID LAWRENCE.
Speaking Of price fluctuations in
business, the White House seeks to
give the impression that this is q mat
ter of control by business men, where
as the widest kind of variation in the
price Of securities nowadays is brought
about by pronouncementS Of the ad-
miniStration itself.
The sequence of events In the last
10 days is interesting to recapitulate.
for it shows how difficult it is for busi-
ness to make any plans or commit
ments.
September 30-Radio speech by the
President conveying encouragement to
private profit system and to business
stability.
October 1-And thereafter, series Of
conferences with business leaders
looking toward establishment of indus
trial truce. Impression created on
business is that stability is being
sought In earnest.
October 4-Speech by Donald Rich
berg, director Industrial Emergency
Committee. expressing some common
sense ideas on collective bargaining
and warning against extremists in the
labor controversies of today. Excellent
effect on business confidence.
Another Richberg Speech.
October 9-Speech by Mr.. Richberg,
in Chicago, arguing that people
clamoring for balanced budget were
grossly ignorant or demagogues or
politicians. Unsettling effect on flnan-
cial communities.
October Indications that Treas
ury has completed its reflnancing and
will close its books on latest issue and
defer another long term financing for
a while. Plan fairly successful and
bond market stronger.
October 10-DiScuSSion at White
House with the press correspondents
on the general subject of raising price
levels, but with no reference to de-
valuation or monetary experiments.
Beginning of unrest in markets. De-
valuation suspected.
October 1l-Appearance at the
White House of Prof Warren. author
of the commodity dollar policy and
variable gold content idea. UnSettle-
ment in financial world increased.
October IL Announcement on
White House doorstep by Senator
Bulkley of Ohio, member of Senate
Banking and Currency Committee,
that further devaluation Of the dollar
might be found necessary by the ad-
ministration. Market prices Jumped,
as an inf1ationary tendency is always
associated with any devaluation of the
dollar.
Contradictory Attitudes.
Other instances of contradictory at
titudes could be given which prove
that the Government Of the United
States, its various officials and Spokes-
men. are today able, by a mere nod
Of the head or by a brief interview
at the White House, to send markets
soaring.
Anybody who tries to buy or sell
securities today on a speculative basis.
is. of course, taking huge risks. and
anybody who is trying to make plans
for the investment of money runs
A-ANO bAAC ANCoIAOAl VI lluCLudLlOQS which
cause hesitation to buy or sell Just
the same.
1t has long been known. indeed
that the administration had the power
to devalue from so cents to so cents
and that the 10-cent margin was
provided by Congress for emergencies
That might arise. but it has not been
assumed. until Senator Bulkley spoke
OF 1t, that there was a possibility of
removing the 50-cent minimum and
starting downward.
Those who have been opposing de-
valuation from the start have insisted
that, If an administration would stick
TO a particular value. the disadvan-
tages of devaluation might be offset
by the advantages of stability arising
from pegging the dollar and holding
IT hrmly at that point, but that de-
valuation is like an opiate-once it is
tried and prices rise there Is always
demand for more of the same dose.
And. after all, if devaluation was
logical once, why isn't it logical
again, 1t always is asked.
Tinkering With Dollar.
Perhaps the most disuuieting news
that has come out of the White House
In q year-in fact, since the crisis of
last October in the bond market
was the revival of the discussion of
tinkering with the dollar. 1t cannot
for a moment be assumed that the
administration deliberately does all
this to Hring about increased securitv
values or that 1t Is unaware of the
damage done to confidence by tinker
ing with the monetary system.
The only way it can be explained.
though not of course justified. is
that, from the administration view
point, the action and interaction Of
foreign currencies in the exchange
markets has a relationship to the
plans for the ultimate Stabilization of
the dollar. 1t may mean, to be sure
that the approach of parity IS further
OF than 1t has been In world cur
rencies. but the secrecy surrounding
all monetary moves in Washington
heretofore has been resumed, so the
only thing that can be said is that
devaluation is on the agenda again.
Those who hope for sound money
and stability may see a moderate de-
valuation as a part Of a general bar
gaining with the British and French
to secure Stabilization of the. dollar
and franc and pound in relation to
each other. The decision to bring
about world stabiliZation would fsr
overshadow any moderate devaluatiun
in such an instance.
But. when the subject Of devalu-
alton is mentioned on the day after
an extended discussion by the ad-
of price levels and ways
Of forcing prices upward, it is ap-
parent that the Government is still
anxious to use, either psychologicaliy
or actually, the instrument of dollar
variation to produce an artificial price
level