Coulee City dispatch. [volume] (Coulee City, Wash.) 19??-19??, 1937-09-30

Observation-Disclosures dI1lOuIlIS W q
bad case of jitters over possible war
and its effects on America, aggra-
waiting business situation which is
none too satisfactory, is obvious in
administration circles, particularly
in the Federal Reserve board.
This is the second reason for the
recent action desterilizing $500, 0O0,-
900 of the frozen gold. The effect
desired to remedy both troubles was
to insure continuance of low interest
rates. Primarily, putting this huge
amount of gold back in use, so to
speak, was aimed at preventing the
slide in government bond prices.
Government bonds have been SELL
ing at price absurdly high-from
an investors standpoint with
due allowance for their tax advan-
tages. Moreover, the banks have
entirely too large a proportion of
their assets tied up in government
securities. But just the same the
government did not want to see a
decline in bond prices. That would
spell higher interest rates on future
government financing.
But that secondary reason, to
make money cheaper for investment
purposes in order to encourage ex-
pansions by existing business con-
Germs and the development of new
business, was also quite important.
Most experts in international af-
fairs do not believe there will be a
world war this year. They think
the nations most likely to provoke
such war are not ready. But there
is constantly in mind the danger
that the situation may get out of
hand.
Memory is still green about what
happened to American business at
first, when the war broke out in
Europe in 1914. After a while bust
ness doomed, the war babies in steel
and munitions grew and bloomed.
The price of sugar and cotton
scared.
But all this was much later. The
first reaction was such a crash on
the stock market that it was neces-
sary to shut it down and keep it
closed for months. The price of cot
ton dropped until President Wilson
himself was encouraging the 'sBuy a
Bale of Cotton movement.
Take Precautions
Nobody knows just what would
happen this time. should the crisis
develop this year instead of 1888 or
1889. The year 1899, by the way, is
preferred by most experts as the
most likely time for the next world
war. So the reserve system is just
taking precautions, providing in adj
vance the certainty of plenty of
cheap money to cushion possible
temporary drops in prices, not only
of securities, but commodities.
This cushion, most experts figure,
would be necessary for only a short
time. Ways and means would be
found by the belligerents to get
needed supplies from America de-
spite any and all obstacles, the neu-
trality law and the reluctance of
this country to buy foreign bonds or
extend war credits to the contrary
Notwithstanding.
Very confdentially, of course, Off
Gals admit that the neutrality law
would not prevent United States
manufacturers from selling air.
planes, or tanks, or cotton, or cop
per to neutral countries from which
they could quite simply be shipped
to belligerents. But this would take
time-that is, to get the new roads
to the market in working condition.
But the sort of trade that made
Holland rich during the last war
would certainly develop in some
way or other.
All of which, however, does not
reassure the people who seem to
want to get rid of their securities
so as to be ready to jump into some
thing new under changed conditions,
or perhaps just with an idea of
playing safe. This attitude adds on
to the desire of so many to hedge
against imitation.
Gets a Laugh
There are lots of chuckles in
Washington, and especially in the
State department, at James w. Ger
ards new job. The idea of the war
time ambassador to Germany and
Democratic war-chest fund provider
figuring in tourist agency strikes
the average diplomat and the aver
age political bigwig as sort of a
comedown.
But the job is far from a joke.
Secretary of the Interior Harold L.
Ickes does not think it is a joke.
Neither do the railroads leading to
the West, nor the hotel men from
the Rockies to the Pacific. They
think Jimmy has what it takes to
bring them some new business, and
very high-class new business at that
suites instead of singles with baths
in the hotels, drawing-rooms and
compartments instead of tourist
sleepers on the railroads.
For Gerard's job is to make de-
sirable to his old friends in Ger
many and throughout Europe-and
to their friends-and through the re-
sulting publicity to many more-the