Evening star., 1935-03-20

Discussion of the Presidents S task of
holding inflationists in check results
from the statement of Donald Rich
berg, in Boston, that there will be no
currency imitation as long as Mr.
Roosevelt is President Many news
papers take the position that the as
surance given is dependent upon un-
foreseen conditions, but that an active
battle by the administration against
cheap-money advocates would produce
good results.
Imitation, as commonly understood,
Is described by the Rochester Times
Union as lust as unfair as the defla-
tion that reached its lowest depths
prior to abandonment of the former
gold standard" The Times Union
continues: That has been corrected
in part, though not vet completely. by
the monetary policy of the present
administration. 1t was unfair and in
furious that the holders of mortgages
or bonds should have a legal claim to
a greatly enhanced return. in terms
of buying power. And it would also be
unfair and injurious to have Just
claims wiped out by reckless imitation.
What is needed, after a really fair and
honest price level has been attained,
is dollar which will have constant
buying power. A dollar of constant
buying power will not represent any
fixed amount of gold, silver or any
other single commodity. 1t will be
constant ir terms of the average of
the whole list of important goods or
commodities. Economic science is now
prepared to establish and maintain
such dollar 1t will be a managed
currency in the sense of being con-
stantly adjusted to maintain definite
buying power. But it will be a stabi-
lized currency in a far truer sense
than any currency fluctuating as
widely as the former gold standard
dollar did
A different point of view is present.
ed by the Kansas City Star. which
quotes a statement from President
Roosevelt, that there is mo contem-
plation of devaluing the dollar" and
argues: THE Presidents denial is in
line with the blunt statement made
recently by Donald Richberg that
there will be no imitation in this coun-
try while Franklin Roosevelt is Presi-
dent Potential initiation already ex-
lists through the combined effect of
the devaluation of the gold value of
the dollar and the huge increase in
surplus bank reserves, growing out of
the sale of several billion dollars of
United States securities to the banks,
and additional credit imitation is pro-
posed in the new banking act now un-
der consideration in Congress. But
neither currency imitation nor credit
imitation can automatically put prices
up and stimulate business until it
arouses individual initiative among
buyers and producers. Money must
be used in the markets and in indus
try to affect prices 1t is without in
fluence lying idle in the banks and
has no important effect as a stimu-
liant to business when distributed by
the Government in the form Of re-
lief"
"Hand-over-fist spending is a threat
of imitation in ITSELF" declares the
Worcester (Mass.) Evening Gazette,
with the further comment: THE
distinct worth of Mr.. Richberg's
pledge is that it purports to stamp the
administration as anti-iEflationary in
objective. Therein it is a welcome
and timely word. But while spending
and borrowing continue as at present,
fat guarantee against further in
fiation of any kind seems an extrava-
CANT statement"
It is maintained by the San Fran
cisco Chronicle that imitation is
rarely a separate. voluntary act.
Rather" continues that paper, ''it Is
the automatic result Of other acts.
And some Of these acts have already