The Western news. [volume] (Libby, Mont.) 1933-current, 1934-01-18
A CHEAPENED DOLLAR.

In his message 10 tile toii5ieoo -
Monday, President Roosevelt announced
one more step in his plan to restore
prosperity to the American nation. lie
asks the congress for authority to take
over all the gold bullion and gold com
held by the federal reserve banks and
also for authority to reduce the gold
content of the gold dollar, at some
where between so and 60 per cent of its
present content. This is the long ex-
pected and discussed devaluation OF the
dollar, or cheapening of the dollar
There is wide difference of opinion
as to the effect this will have. The adj
ministration evidently holds with those
economists who believe that by cheap
ening the dollar the prices OF commodl-
ties can be increased. That is the pur-
pose back of the Roosevelt move. BY
cheapening the dollar, it will buy less
in wheat and flour and meat and
clothes. less of all the multitudinous
! items that enter into the business life
of a nation. As the dollar buys less, the
price of the articles will naturally go
up in price as measured in dollars.
That is the theory back of the devalua-
ton move.
Undoubtedly the Presidents chief
purpose in taking this step is to in
crease the price of the products the
farmer grows. With an increase in the
price of farm produce, the farmer
would have more money to spend, this
would again be felt in industry and the
wheels would begin to be speeded up
all along the line.
That is the hopeful theory back OF
this move. The question is, will it work
out that way? 1t is to be hoped that
it will but there are numerous econo-
mists who claim that it will not
In the meantime-While these matters
are being adjusted, it would seem thai
there are sure to be some unhappy dis
locations. Unless the Presidents dollar
devaluation increases prices of com.
modities, it will be failure. If it il
successful and thereby does increas'
commodity prices, then there must fol
low an increase in the cost of livinl
and the consumer must pay more 10
what he buys Can the average Wag
and salary man today afford to pa,
a higher price for the things he has +
buy? The answer is manlfestly nc
Unless he either works more hour
or receives higher wages, he Is goin
to be worse off than before the in
crease Of living costs caused by III
cheapening Of the dollar. This is an
swered by the statement that wit
higher farm and commodity prices
there will be more prosperity and NOR
money to spend and everyone wi
benefit thereby, including the laborin
man. But until that increased employ
ment arrives, it is evident his Twin
costs are going up provided the Presi
dents plan works successfully. An
history teaches that wages so up slowe
than do commodity prices.
There is another angle to this cheap
ening Of the dollar. Those who ha1
worked hard, saved, lived sensibly ar
thereby have accumulated a mode
cash reserve with which to suppo
themselves in old age will find Il
purchasing power Of that cash reser'
decreased to some extent by this act
the President PROFESSIONALLY some
those who have just been able to &
along now will not be able to do 50
the Presidents plan to increase pric
is successful To that extent it is TAXI
from those in modest circumstanc
as well as from the much malign
rich, certain percentage Of thu
wealth
The reply to this argument is II
the President is attempting what
called controlled or managed dollar
one that does not fluctuate wildly
and down in purchasing power. I
intention is to devalue the dollar a
thereby increase prices SO that the d
lar will have about the same p,
chasing power that it had in 1926 7
relation Of prices and what dol
would buy in 1926 is considered
!. basis for the business world by
President and his advisers.
This action by the President will !
questionably have an important be
ing on our foreign commerce. But
is too extensive subject to be 6
into here.
The Presidents attempt to man
the dollar is an experiment. The C
servatives will consider it rad
move. But those of liberal tenden
can discern in the Presidents mes
...Jo~+ .o4orftny m s11oun 4