The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-03-12

ownership, the $4,000, O0o, 900 stabiliza-
ton fund. the billions Of RFC financ-
Ing and the new government grip on
banks, securities, markets, and other
business exceed the widest dreams OF
the average citizen q year ago.
CREDIT Is SAFEGUARDED
Economic developments and political
pressure compelled initiation. Always
intent on restoring the 1926 price level
and reducing the depressions intoler.
able burden Of debt, Roosevelt obtain.
ed from Congress the permissive
Thomas amendment and stalled Oft
initiation by legislation.
He wanted to manage initiation him
self. He believes he can control it.
The president never has lost sight
Of the vital need Of preserving gov
eminent credit. Billions Of dollars Of
that credit are being used to put over
the recovery program-and it must be
good.
There are nearly Is many theories
and doubts about the money policy as
there are monetary experts, but the
detectives are expressed simply by
Roosevelt himself.
To him, sound money" Is the dollar
Of 1876 dollar which would buy the
same amount Of goods and pay the
same amount Of debt as seven years
ago. He wants dollar with perman-
emily stabilized purchasing power.
\ + +
TRADE Is STIMULATED
Rising prices stimulate business. The
deprecated dollar, according to Roose-
welt, will raise commodity values to Z
level which will enable agriculture
and industry once more to give work
to the unemployed"
The dollar, since its recent devalua-
ton, contains but So per cent Of it,
former gold value. The domestic price
level. though gradually rising, has not
been affected violently.
But the foreign importer finds that
his own domestic currency will buy
some 20 per cent. more American goods
than it would year ago. So he buys
heavily.
First effect is to reduce our agri-
cultural SURPRISES and stimulate those
American industries engaged In ex-
port trade.
Other price-raising forces are at
work-the NRA, the AAA, RFC, CWA
and other government spending and
lending agencies. The official theory
is that q gradual price rise Is newt
able In the months ahead, amounting
to some 10 per cent.
That theory Is tied to the commod-
ity price index, now above q as against
the aim Of 100. the 1896 figure, and as
against 500 on March I, 1893. It's the
highest since May, 1891.
i \ \
LIVING COSTS TO RAISE
Higher prices mean higher cost Of
living. Millions Of us are going to be
squeezed-at least temporarily-since
1t is automatic that wages and salaries
go up more slowly than prices.
Meanwhile. however. farmers, bust.
ness men, and others who owe money
will find 1t easier to pay their debts
As fixed charges become easier to pay
there will be more money with which
to buy goods.
Recent monetary moves insure q
huge expansion Of bank credit, coin.
Gliding with . heavy return Of Ameri.
can capital from abroad and inten.
sification Of the administration effort
to convert banks to q more liberia
lending policy.
CURRENCY Is MANAGED"
The treasury's $4,000 900 900 stabil.
ization fund, created from the profit
accruing from devaluation and i'm.
pounding Of the Federal Reserve gold
will be used to manage the currency
manage the dollar In foreign ex.
change-and keep It down and sup.
port the government bond market.
The Roosevelt plan Is to peg thu
dollar to the price level when 1t reach.
e. the desired level.
This may mean the commodity dol.
lar" urged by Prof. George +. War.
rem Of Cornell, his chief monetar,
adviser. At any rate. the attempt
would be to keep the purchasing power
Of money steady by changing the golt
value Of the dollar slightly from time
to time.
Roosevelt has balanced the bulge,
for ordinary government expenses b,
taxation and drastic reduction. Thu
emergency billions are being borrow.
ed and new taxes imposed for thei1
amortization.
TAX TILT AVOIDED
No general tax increase Is on thi,
years program. Thanks to the new
liquor revenue, some excise taxes have
been repealed. But Congress hopes K
raise 500. 100000 In new revenu.
through plugging loopholes In TIL
present law, impetus for which came
from the senates investigation Of tn
J. p. Morgan firm.
Aside from imitation. the admins,
tration d wasing Z direct otfensiv,
Against the debt burden. Federal asen;
cies are relinancing farm and hom,
mortgages and Roosevelt sisnificantl,
has asserted that private. industrial
and other debts should be scaled dow1
BY interest reductions.
He especially emphasises iuteres
rates on municipal debt, home an
farm mortgages, and railroad securi,
ties. He . supporting the Wilcox bin
designed to scale debt charges Of abou
1900 cities. and town. now IN default
on their bonds.