Prices & Money

As he sometimes does when he has a point to make to the country through its newspapers. President Roosevelt primed a friendly newshawk to ask him about commodity prices at last week's first press conference. He thereupon delivered a 20-min. discourse. Chief points: 1) the Administration, through AAA, HOLC and NRA, is still firmly committed to raising the national price level; 2) the goal will not necessarily be the fabled 1926 index, may aim at pre-War parity between agricultural and industrial prices; 3) wages will have to be upped responsively.

What, asked a reporter, if prices started to "go through the roof?'' Would there be further dollar devaluation? For this question the President was not prepared. He laughed it off with a noncommittal answer to the effect that the Administration foresaw no "immediate" devaluation.

The President's deliberate ambiguity about his money plans did not encourage supersensitive businessmen, whose apprehensions he had spent the last three weeks trying to assuage through quiet missionary work among bigwig White House visitors. That very day a White House guest had been Morgan Partner Russell Cornell Leffingwell, a potent Democrat and Wartime Assistant Secretary of the Treasury. Twenty-four hours later, Business was given something to get really jittery about.

Stepping out on the White House steps after a morning conference with the President, Ohio's rotund Senator Robert Johns Bulkley, a conservative member of the Banking & Currency Committee, told the Press: "We discussed further devaluation of the dollar. I don't think it is necessary now, but it may be in time and I am not unalterably opposed to it.'' He reminded reporters that an Act of Congress would be required to authorize the President to reduce the dollar's gold content below the 50% limit set last year. "I think it might help. Prices must go higher. I agree with the President on that." And less than an hour later. Cornell's Professor George Frederick ("Commodity Dollar") Warren, appeared at the White House to break bread with the President for the first time in many a month.

Down went the dollar on every foreign exchange. Up rocketed prices on the New York Stock Exchange where investors bought 1,400,000 shares of securities.

Someone reminded the President at Friday's press conference that it was his 15Oth since he entered the White House. "I congratulate you on your endurance," remarked the President. The correspondents chorused: "Same to you, Sir!" But the President was not in a humorous mood. He taxed the reporters for giving the country a "bum steer." The reporters countered by asking if Mr. Roosevelt now had anything specific to say about his future money policies. Impatiently the President told them: "I am neither a prestidigitator nor an astrologer." Forthwith he denied that he and Senator Bulkley had talked about anything except Ohio politics. Any impression that he and the President had talked about dollar devaluation was "entirely in error." declared Turnquote Bulkley. His White House mission had been solely to promote Representative Charles West of Ohio for budget director.

But the President had an answer of action that seemed more effective than words.

Three days before it was legally due or expected, the Government's call on $1,870,000,000 worth of 4 1/4% Liberty bonds was announced for April 15. The call was merely a notice that the Government intended to refinance this big borrowing at a lower interest rate. Since such a whopping operation has to be undertaken side by side with huge current financing, it is imperative that the Government's credit be 100% when the deal is consummated. Announcement of the intended operation virtually served notice that the country's financial status quo would be maintained for at least the next six months.

Having made that dexterous pass, Prestidigitator Roosevelt further manifested his intention not to rock the country's boat by taking Governor George L. Harrison of the New York Federal Reserve Bank, a financial conservative who views New Deal economics with skepticism, for a week-end cruise on the Sequoia. Result was that by the week's end the nation's businessmen had got another grip on themselves. And the arch-Republican New York Herald Tribune front-paged a Washington "dope story" documenting the thesis that there was "a growing rapprochement between the President and Business."

This file is automatically generated by a robot program, so reader's discretion is required.