Evening star., 1934-10-15

rency collapses in Germany, Russia
and Austria. Yet Il must b remem-
bered that France, Belgium and italy
may be cited - examples Of Success
ful revalu6tion Of monetary units. II
u not necessary 70 contend that such
revaluation has no bad effects at al:
It u submitted that the good effects
outweigh the bad.
A reduction "a the gold content Of
the dollar. or, - It = conversely ex-
pressed, the arbitrary increase In the
dollar price Of Gold, tends to lncreese
the general dollar price level IN, the
same proportion. and, II It were the
only factor Affecting prices, We might
expect change In the general price
level exactly equal to the change In
the dollar price Of gold.
IT b agreed among economists,
however, that Il normally takes con-
siderable time to effect the readjust-
ment Of general prices TO the reyalued
dollar. and the length Of time that
may Be required depends upon %
many complex factors that It cannot
be accurately forecast. While this
time + running, all the other iuflu-
ences on prices are continuing to
operate, and they complicate the Sit
uatton to such degree that the exact
result Of dollar revaluation on prices
cannot be predicted with any more
accuracy than can the price Of any
particular commodity.
The fact u clear, however, that
since We went on the gold standard
We have had very substantial de-
crease IN prices Of commodities and
property. and II 4 also true that the
general average increase has 80 far
been somewhat less than the increase
In the dollar value Of gold which was
fixed by the President.
In view Of the repeated failures and
inaccuracies OF experts in predicting
price movements, It must be con-
ceded that prediction Il hazardous.
There are, however, two factors which
seem to point to the probability OF
rising prices-the fact that world
prices In terms of gold at last seem to
have reached their resistance level.
and the fact that the increase in do
mestic prices expressed In terms Of
dollars still averages less than the
increase in the price Of gold. and 30
should still continue moderately up
ward.
The President has indicated that he
would like TO see our price level some
what higher than 1t now Is, and I be-
lieve he Il. entirely right. But II prices
are going somewhat higher, anyway,
there is no need Of any further change
in the gold contentof the dollar. ANY
such change Is itself . disturbing fac
tor in business, and It should not be
made unless the necessity for It Is
clear.
Inasmuch - we are now definitely
progressing toward recovery. and as
both prices and business arr improv-'
ing. there Is no reason for any change
In the standard of value, and 1t is
distinctly reassuring that the Presi-
dent has made It clear that he has
no present intention Of using his
power to make such q change.
The President Is wise also in re-
fusing to state definitely ut this time
that he will never effect Q further de-
valuation. regardless Of future condi-
tions. The knowledge that the Presi-
dent has the power to prevent q fur
ther slump in dollar prices and that
he has the courage and determination
to use that power, II necessary. should
be definite reinsurance to business
and not In any sense danger.
It Is possible that We may hear some
further in6ationarys proposals and ct
some later time there may be more
genuine need for dollar devaluation
than now seems apparent. but ,un-
doubtedly the majority of both houses
cf Congress VII support The President
u the sane sAnd seQn monetary
eoQrss which. n. has ID and v1ll
spf pntint a 1s1lI = y ,sss,'ls
tcSSslA - & by { NJ, g !, = xs,iiean