Evening star., 1936-10-04
DOLLAR STERILIZATION
MONETARY SOLUTION
Observer Holds Morgenthau's Recent
Step Will Be Vain Unless U.S..
Budget Is Balanced"

rencies, and the restoration Of inter-
national trade.
The London Conference was abrupt
ly broken up by q message from
President Roosevelt, and 10 this day
the public has never learned why
Mr.. Roosevelt sent that message. Un-
less there Is adequate explanation,
that disruption Of the London Eco
nomic Conference in the Summer Of
1888 would seem possibly the most
serious Of all the charges that Mr..
Roosevelt's critics can bring against
him. But if there is reasonable ex-
PLANTATION, and If his present step
toward another stabilization turns
out to be effective, the world will
forget the three lost years.
Sterilization OF currencies will not
alone get the world surely back on the
track. A sound fiscal step within the
world of international relations can
not be effective If it is accompanied
by unsound fiscal conditions within
any one of the nations party. to the
international agreement. The subject
of domestic imitation cannot be con-
sidered apart from the subject Of in
ternational stability. Indeed, inter-
national stability Of several currencies
cannot exist If there Is instability of
one of the currencies domestically.
Mr.. Roosevelt's recent action, cheering
and wholesome as its promise Is, can
be of no use unless he at once takes
the corresponding course Of making
our own dollar stable within our own
borders.
The two are closely related. inter-
national stabilization should improve
international trade; improved inter-
national trade should result in i'm
proved domestic trades. improved do
mestic trade should decrease unem-
ployment and thereby decrease Gov
ernment expenditures and at the same
time increase the Governments rev.
enue from taxation. In short, Mr..
Roosevelt's present step about cur
rency internationally is help do
mestically. To use the familiar word,
Mr.. Roosevelt's present action lessons
the danger of imitation in the United
States But imitation cannot be sure
ly averted unless Mr.. Roosevelt takes
vigorous, affirmative steps toward re-
ducing Government spending, toward
doing less Government borrowing,
toward-one Is obliged to use the
worn phrase-toward balancing the
budget"
nteau~eknw. nAnaxnA AarkA
At the moment when Mr. Roosevelt
took his curative step toward inter-
national stability of our currency
and that of the British and French,
the internal stability Of our own dol
lar had become a subject Of acute
discussion. 1t was made acute by a
statement Of Republican Vice Presi-
dental Candidate Mr.. Frank Knox
in a campaign speech. Mr.. Knox's
statement was:
To-day no life insurance policy Is
secure, no savings account is safe
Let us say at once that Mr.. Knox's
use Of the word safe" was wrong.
When We say that bank is not safe"
we mean it is likely to fail, likely
to go into bankruptcy and close its
doors. That is not what Mr.. Knox
meant and that condition does not
exist. I incline to think, also, that
Mr.. Knox'S use of the word "Se.
cure" about life insurance policies was
wrong.
For myself, let me begin by saying
that every life insurance policy in the
United States is secure. Il doubt il
any unsound life insurance company
is left in the United States; practi-
cally all are now under rigid super
vision by State governments)
Every holder of a life insurance
policy for 81 900 will get his 1000 dol
lars on maturity. About that no pol
icy holder need have the faintest un-
easiness.
But there has been sufficient res-
son for policy holders to be uneasy.
1t is best the country should know
this. Widespread knowledge may help
to correct the condition.
Every holder of q policy for $1,000
will get 1000 dollars when the policy
natures. That is, he will get 1000
pieces of paper called dollars. They
will be identically the same as the
pieces of paper which are today called
dollars. The policy holder will get
dollars of exactly the same sire, shape
and color as the dollars he pays in.
The dollars he gets back will have
exactly the same printing on them as
the dollars he has paid in.
Nevertheless, the dollars which the
policy holder gets back in two, three,
four or more years from now may
be very different from the dollars he
has paid in. The reader will observe
I say may be-; I do not say will
be-" The danger of imitation, while 1t
still exists, has been materially re-
duced by Mr.. Roosevelt's step toward
better world conditions.
May Differ In Power.
The dollars a policy holder gets
back may differ greatly in purchasing
power from the dollars he pays in.
And since purchasing power is all
that q dollar is good for. 1t follows
that difference Of purchasing power
is all the difference in the world.
Each dollar that the policy holder
has paid in during several years past
would buy, let US say, 10 loaves Of
bread or 10 quarts Of milk. The dol
lar which the policy holder or hia
beneficiary gets back three or four
or more years from now may buy
only i've loaves Of bread, or even less,
Some persons, deeply impressed by
the danger ahead, have thought that
the dollar which the policy holder
gets back several years from now may
buy only about two loaves. That would
be extreme That would only come
about through long continuance oi
improper fiscal practices.
What is this improper fiscal prac-
tice? It consists Of the Government
spending more than it takes In, ex-
cessive Government spending, exces.
sive Government borrowing. What d
the remedy? It Is for the admins.
tration to adopt policy of not spend.
ing any money except what 1t has In
HAk L. d.