Evening Star Newspaper, June 18, 1933, Page 29

EDITORIAL SECTION he Sunday Star, Part 2—6 Pages IMPROVED OUTLOOK SEEN FOR RESULTS AT LONDON Developmenls Outside of Trade Parley | Breaking Down Widespread Skepti- cism, British Economist Finds. BY SIR ARTHUR SALTER. (Member of British Economic Advisory Council.) | rary stabilization of exchanges, Tariff | and exchange fuctuations during the | conference would be destructive of the NDO! ic | h required for success, an —The World Economic | atmosphere requ 3 °cmxll,,.;‘." e & B o}‘ the tariff truce already instituted and deep anxiety, The war debt|the Dartial stabilization of exchange WASHINGTON, B £ SUNDAY MORNING, d the +. | now being attempted may not only re- contzoversy clouded the prospect | Low Belng stiempied, mey hot ol 25 Wildly. A “tariff truce” under such |fOF more permanent arrangements with- | ditions had little meaning and in the conference itself. | Ened likely to have no continuous t for Al ment. or additional adhesions. Gioad Esompes . | erc were deeper causes for skepti- ~ One notable tendency was to search i:: and d:xbt. p‘f'rhe prospects of x:.hg for some compromise between moderate Disarmament Conference, after some economic nationalism and a system ter promise, seemed poorer again. Which wculd permit a substantial resto- New ‘taziffs and quotas, even those im- , ration of world trade and in particular ed for temp: v reasons suc’: as to would fit national quotas into a frame- prcve a country’s balance of trade Work of international agreement. ana eo prevent drain on its currency On the whole. early discussions sug- —Drawn for The Sunday many other industries today, ironically, a kind of perverted socialism. It is cperated, in reality, for the benefit of only labor and consumer. d These conditions grew out of basic factors in the industry that have cr talized in the last decade. Shortly after the close of the war. 2 oal began to decrease the demand fer ¢ due to =ie + asing use of oil, gas Star by Stockton Mulford. minimize as far as was possible the ap- plication of new machinery to mines in order that skilled machinists could devote their time to war materials. The conservation section functioned with the objective of reducing the coal consumption required in the develop- ment of power—meaning that it sought to make maximum use of existing powex JUNE 18, 1933. Industry to Avoid Suicide Goal of Industrial Recovery Measure Designed to End Ruinous Competition Is Full of Possibilities factlities. CURRENCY STABILIZATION VITAL CONFERENCE ISSUE ;Fixe’d Trade Declared Dependent on Settling Problem—Dollar Expected to Be Fixed at 1926 Value. |in relation to the American dollar has | ranged between $3.50 and over $4. This condition, duplicated as to every occurrencg in the world, makes it very cuficult for a business mar in one country to carry on transactions with a business man in another country. | During the thirty days or sixty days or | more required to complete the transac- | tion and receive payment, the currency involved may go *» or down through a range of 20 ;' ~ cent or more. A business man“in America, beginning a transaction with a business man in | Great Britain (and the same is true as to every other county) is subject to four | different sets of uncertainties about currency. In terms of gold the dollar and the pound may both rise, though in different degrees; or the dollar and the pound may both fall, though in differ- BY MARK SULLIVAN. TH the International Mone- tary and Economic Confr - ence at work, we shall hear much, until it succeeds or fails, about “stabilization of currencies.” It is important that America should look at this clear- sightedly. It contains much worth— but not as much as the too hopeful may see in it. By many, unhappily. it will be regarded as a mystic phrase having the quality of “abracadabra’” ! another of those “white rabbits” of which we have had a considerable pro- cession since this depression began; one can recall them, and recall how briefly their hoped-for potency lasted. “technocracy,” “stamped currency.” “scrip,” “‘morzlorfum,” “price-fixing." 1ves, had lasted long enough to be tressed by important interests. BMoreover, their very complexity was ®uch as to make the difficulties of Regotiation seem almost insuperable. Worst of all, the fall and fluctuations the dollar had introduced a com- ! gest a good prospect for a substantial measure of agreement on the monetary policy and for provisional stabilization of exchanges conditional on the ultimate return to the gold standard at appro- priate parities with corresponding de- valuation. and water power. and the increased efficiency of fuel-converting equipment In spite of this increase in demand, which was reflected in constantly fall- ing prices, the effort to produce coal was everywhere increased. The balance cating factor of the utmost impor- | ce in every sphere cf the problems fore the cgnferance—tariffs, indebt- | flm and the restoration of credit e. Many Favored Postponement. ‘The delegates remembered that it #ms many months before the reper- ©ussions from the fall of sterling could even be measured, and they asked what ¢hance the conference would have had months after the pound left the d standard in September, 1931. Many o the most experienced delegates Sould therefore have preferred a post Ponement of the conference for sev. eral months so some of the results of fhe depreciation of the dollar could be Ween more clearly and in some measure dealt with before so necessarily cum- Brous an instrument of negotiation as $he World Conference assembled. g cretary Hull of the American group | Was_passionately anxious to establish 'vonditions necessary to the restoration of world system. But it was known Shere were other forces at work in| ‘America, and it was feared these forces | ‘were increasing. There had been much and appar- * ‘'ently increasing consideration of an| alternative policy to be followed if the | conference failed, and nothing en-| dangers the fate of a conference so much as simultaneous preoccupation Concerted “equalization” measures to sustain new exchange rates and to give some substance to central banks whose | Teserves are weakest seem not improb- able. On such a basis the removal of exchange restrictions and some of the new tariffs and prohibitions imposed | mainly (o relieve the strain on curren- cies should be possible. Some of the conditions for resumption of foreign trading would thus be restored. Reduction of tariffs that have been | long in existence will be more difficult. | No large scale and immediately drafted | reductions are to be expected. Tariffs | are too complex, time is too short, and | the other tasks of the conference are | too numerous. But some excesses may | be removed, further increases arres&edj and the way prepared for gradual re- | duction by bilateral and regional agree- | ment. As regards the latter, important | discussions will turn round the most- | favored-nation clause and conditions | under which exceptions should be ad- | mitted. In addition some safeguards may be | agreed upon against the worst evil of | all, sudden increases of duties without notice or consultation. Chamberlain Address Notable. Speeches indicating the sense of deep | responsibility resting upon the confer- | ence, and recognition of the spirit in | Wwhich its problems must be faced and | the main direction in which a solution between production and consumption :Ith the question of what shall be dons the conference fails. Pessimistic inferences were drawn from the nl:mne from London of Ray- nt should be sought were made by King George, Prime Minister MacDonald. Cor- | dell Hull, Gen. Smuts and T. V. Soong | at the opening of the conference. ‘ Among those who made definite pro- | posals Neville Chamberlain has had ite with the most | most attention. His address was notable | was destroyed and, as a result, the American soft coal industry as a whole is in a desperate condition. Coal is actually selling below the cost of production. Most of the op- erators are bankrupt. or nearly so There is practically no return to the investor, little for the Government, and not a living wage for the miners in many districts. The purchasing power of the coal industry, which in the past has amounted to millions of dollars annually, has been virtually lost to the other industries of the Nation. Such a perversion of the real aims of indus- try cannot happen if the national in- dustry recovery act fulfills the hopes and expectations of its sponsors. Oil furnishes another example. Oil| men say: “The demand for oil has| fallen off during the last two years , But the facts are that more new oil | wells were completed during this pe- | riod than in any other similar one This in itself is enough to drag prices below the living level for the greater part of the industry. But oil possesses | a peculiarity that makes it an especial sufferer at the hands of unscrupulous | producers. An oil pool is a continuous | reservoir which can be drained through | | any single well. Hence, if your neigh- | bor pumps, you must pump, too. or | lose your oil. Thus, with unrestricted | competition, a single operator can keep | busy all the other operators in a | given pool. whether they want to cur- | | tail production or not.” |, These and scores of other blunders | in the guidance of our industrial prog- BY CHARLES E. STUART. Note—It was to Mr. Stuart that George Bernard Shaw referred in his New York address two months ago. The dramatist spoke of a “very remarkable report,” made by an American, which told the Rus- sians how to get themselves out of their production difficulties. The American was Charles E. Stuart. Mr. Stuart is an engineer of inter- mational reputation who is used to planning industries on a national scale. He directed 'he rehabilitation of old mines and the planning of new ones for the Russian govern- ment. During the World War he was associated with the Government's control of industry, serving as chief of the Power Conservation Section of the Fuel Administration—and he ress, combined with a_perfectly natural business depression, have brought us very close to a condtion of national and individual bankruptcy. | Russian officials that | their American in Origin. These were instances of planning measures of that period carried out on a national scale with Government co- operation or artnership” to assist them. And the luential hand of Gov- | ernment “partnership” was often needed to bring pressure that effected the needed result. The national industrial recovery act which seeks to enlarge Government partnership in business to a greater ex- tent even than during war time will go into effect with the approval of the great majority of our industrialists. A few years ago, however, it would have been resented by all industries. And business, almost to a man, would have denounced it as an attempt to “social- ize” or “Russianize” America. Such ideas imply that centralized planning can only be cairied on under a political system very different from our own. I have, in fact, been told by comprehensive planning is incompatible with so-called capitalism. Yet planning on a large scale is essentially American in its origin and like many other details of industrial policies it was bor- rowed by the Russians from us. But Russia is not the only country that has used central planning to ad- | industry from a condition of chaos fully as bad as that afflicting our own coal industry. This act provides for central and dis- trict “schemes”—to use the British word —to regulate the production and sale of surplus coal by fixing the total amouni Prime Minister has directed other comprehensive tasks. But with the passage of the national money available for many fundamental- ly unsound capital investments. The re- sult was an overproduction of the means of production. vantage. The Canadian banking system | The attempt to utilize these facili- is an excellent example of a well- | ties at all hazards is chiefly responsi- lanned organization. Each bank_is | ble for the ills of many of our industries. as strong as the whole system and be- | Sales can be temporarily made at almost cause of this there have been only two | any price if the seller is ruthless about banking failures in that country within | cutting wages and careless about such the last 20 years [mmgs as ux;xterml = u-wm.me‘;n,ta bills Perhaps the best example of national | payable, p maintenance and taxes. industrial planning comes from Great | Efforts to restrain this kind of selling Britain, when the coal mines act of |have so far failed, largely because of 1930 rescued the British coal mining |the protection given by the anti-trust |laws. Proper planning methods, esti- | mating at intervals consumption for a | few months in advance and prorating | among the members in good standing, | will eliminate this and at the same time | take care of the “bad actor” and the acketeer. the “equalization fee” for farming, the “McNary-Haugen plan” for the same | Industry. Not all of us—by no means -1l of us—have yet learned that neit™® - the state of the world can be altered nor any other condition attained by some one waving a wand and uttering -a magic word. Both the magicians and the magic words have failed us. Not merely the magicians, but the solid men in whom the world justly had faith. There was a “Dawes plan” and a “Young plan.” Both are in the scrapheap of failed hopes, and it has turned out that neither Charles G. Dawes nor Owen D. Young in their personal relations to or responsibili- | ties for American corporations and in- stitutions, was any more able to resist this depression, nor escape it nor avert it, than any of the rest of us. The examples are countless in which not | only have slogans and phrases and | formal “plans” failed, but men who ! were the symbols of success, Gibraltars | of business, symbols of almost omnipo- | tence, very demigods—are now tum- | bled down. > Declares Phrase Cannot Help. So the first point to remember about “stabilization of currencies” is that the phrase as a phrase cannot help. | | No phrase and no word can help. | | Only things can help, things as dis- | | tinguished from words. The thing that | stabilization of currencies means can | help, the condition for which that | phrase stands can help, can, indeed, be almost alone a sufficient cure. |, But there arises another common fallacy. Almost universally it is as- sumed that the delegates to the Lon- don Conference can meet round a table, can talk, can finally say: “We are now agreed there shall be stabiliza- | |tion of currencies at this figure or | | that”—and that thereupon the world's | troubles are over. The delegates to the London Confer- ence can do no such thing. To ex-| | | | ficulties of the" conference. ent degrees: in terms of each other the | doilar may fall and the pound rise, and vice versa. The conditior makes | trade almost impossible. And so the London Conference is meeting for a purpose which may be stated thus: To take steps about conditions which will cause those conditions to express themselves in stable values of the dol- lar and the pound in relation to each other. (And all other currencies as well.) To take these steps or, in the event of failure of the conference to accept a condition in which the United States will not attempt to do much interna- tional business. The values of the dollar and the pound in relation to each other, that is, their values in international trade, are, in the absence of artificial inter- ference, a natural expression of the currents of trade all over the world. Before currencies can stabilize in their relation to each other, before there can be “stabilization of currencies,” the currents of trade between two countries must arrive at their natural balance. Either that, or the delegates and ex- perts at the conference must be able to estimate with fair accuracy what the future currents will be. The American and British experts at the conference think they can make such an estimate now, and it is possible they can. Natural Course Desirable. I may have overemphasized the dif- It is true that currencies can only arrive at their natural and continuing relation to each other as an accompaniment to currents of trade arriving at their natural rela- tion. And it is true that currents of trade are a pretty formidable matter for the conference to deal with. Nev- ertheless, the conference can do much toward letting those currents take their natural way. Moreover, even without attempt at a fixed relation of curren- cies, the conference can arrange for co-operative policies by the central international industrial recovery measure the era of to be produced annually, the quota for Prices Must Be Considered. plain why they can't, one may quote a | banks of the world. Even without doing ou for his emphatic statement in favor of | , was president of the con- "Donald, Jerence, and disability, as weil as privi- Jeges, sttach to that office. The Brit-| ish delegation as & whole seemed more | tional or nationalistic than the coun- | as & whole. Freach and U. S. Views Conflict. Of other delegations, France was ®nown to differ seriously with America concerning devaluation and increase of | monetary action and to er with tain as to conditions of & return to the gold standard, and oth- ers share her views. It is necessary to have these causes of anxiety defined clearly to a) te the extent to| which the first week has relieved! anxiety. Dum;f this week the most important megotiations reflecting the work of the conference have been outside its own messions. The war debt arrangement of June 15 had a psychological atmosphere which will facilitate the solution of ‘other problems; it has restored confi- dence that an ultimate settlement will be such as to prevent war debts from shattering the new structure for world trade, which the conference is trying to establish. It has also given assurance that President Roosevelt is determined %o press on with the international policy he has announced, and not to turn back to &n alternative. Thus, fears that the work of the American delegation may be undermined at home have been re- @duced, though not removed. Only less important have been the efforts of central bankers for tempo- raising prices by combined monetary | economic measures, which he specified. His proposals represented a substantial British policy, | along lines likely to facilitate an agreed ! advance over previous basis with America and with encugh | other countries to obtain effective con- | certed action. Mr. Chamberlain's proposals as re- gard tariffs marked some, though a much smaller, advanced toward a less national policy. Frence. Italy, Poland and other countries expressed their doubts about monetary methods of raising prices. But it is increasingly realized that | while a known and concerted policy is important, policies in this matter need! not be identical | Delegates’ Mood Improved. If France desires a more stationary |level of prices from America an ad- Jjustment can be made in exchange Tates. Several countries advocated de- liberate expansion of public works and concerted regulation of production There 1s increasing recognition of the fact that currency stabilization is neither of real value nor possible ex- cepy within the framework of a com mercial policy which makes it certain that tariffs shall be neither prohibitive nor violently unstable, The week has substantially improved | the prospects of the conference and the mood of the delegates. It started | With profound and widespread skepti- cism; it ends with cautious optimism. (Copyright, b= North American News- | Alliinee, Inc) 1 pa Mechanism of Worlc Resembles Party BY WILLIAM ALLEN WHITE. ONDON.—More and more as the International Monetary Confer- s ence develops it seems to follow the lines of an American presi- dential nominating Congress—a konvention without a gallery. Remove the clique noise, ballyhoo, bands, flags end tremendous masses of men watch- ing the show, and you have this co ference sitting quietly in decent digni seeming 1 Monetary Parley Convention in U. singed cat is a fairly good mouser. In the American-headed Monetary Com- | mittee & resolution was passed, wha! amounted to a committee on rules, which provides that every ccm- mittes and subcommittee shall go ahead and complete its own work without re- gard to the progress of any other com. | mittee or subcommittee—an innocent resolution, but the French glared. It takes away from the French the chance to play onc committee re- port against anof to hold up con- | sell to us unless yocu make money. - uncontrolled competitive warfare has | ended and an era of co-operative plan- | ning has begun. We shall no longer trust solely to unrestrained economic forces and individual selfishness, but ' shall try to solve them by framing definite plans -na by taking effective | steps to carry out! these plens. | Planned as Individuals. ply attempt to muddle through. HE buyer for a great American The measure sets up a Federal au-| corpuzntion sat g‘; the head of | thority with wide powers vested in the a shining mahogany table in!President, the chief purpose of which his conference room. Officials|is to aid and encourage industries to of a dozen other corporations| form plans for their own regulation lined the sides of the polished board. and progress, and to see that the pro- The air was blue with smoke. The 12| visions of these approved plans are car- | men had all submitted bids for a sup- | ried out. It can also. when it appears ply needed by the large corporation.!to be in the public interest to do o The depression had driven the figures | enforce plans on industries that fail at which they offered their goods to to plan for themselves. A limitation a level far below the costs of produc- upon the operation of the anti-trust tion In the bitter competitive strug- laws is included so as to permit fair gle business at a loss seemed better | combinations of industry which prom- than no business at all. | ise economies to both producer and yer spoke: “None of you men consumer. ca?:nahkl:)eoutp:n the bids you've sub- Such legislation may seem to threaten mitted. We want to do business with |the very foundations of our traditions. you on a basis that is reasonably pro- ' but actually it carries no such menace. fitable jo you. We don't want you to| We have always been a Nation of Let’s planners. We have Hfillzeduour plan- losses. I'll make you an | ning ability to form enterprises greater | g;"l:: s;ol‘l, nu;)poruon my order among than any the world has ever known, | you on the basis of the business you've and we have prospered in proportion to ‘ done with us in the past, and will pay | our creative effortss But we have fallen | | | For more than two years he has been an advocate of planned econ- omy, and of the principle of co-or- dinating production and consump- tion in this country. His philosophy of the depression is that industry must plan its way out, and not sim- | | | Ve at which you can at least | short because we have planned as in- Threak ’Z?ecxf G 3 | dividualists for our own benefit; we have The arguments for a limited amount | not planned on a broad, national scale, of business at a profitable figure seemed | with the interest of all as our goal. too fair for open dissension. Disap-| However, the type of national plan- pointed, but unable to reject as a group, | ning to meet a demanding objective is | the men sgreed, and the conference not new to us. An emergency requir- | broke up. | ing planning of unparalleled character “But before these men had reached | was thrust upon the country when we their hotels,” related the buyer, “all of | entered the World War. We met it. them had called me, offering to supply ' The Council of National Security and my full, order at @ figure below even |the Industrial Commission were set up suicidal price they had first of- | in relation to the industry of the United red. States. The authority established un- 1 | der the law functioned through the War Reflects Our System. | Industries Board, the Fuel Administra- | is reflected our com- | tion and the Food Administration. LJR.‘?’S%’Z&"J" “its “head ploody but | The objective then was the quick | unbowed. making the only stand possi- | development of the machinery for war- | ble where co-operation is legally afare and the release of man-power for crime. Our industries have been fight- | War requirements. ~For example, the ing with each other for the privilege | Production Committee of the Fuel Ad- of_losing money. | ministration undertook to build up | some profits to the owners, and of safe- each mine and the minimum price to | be_charged | The operating machinery of the plan consists of a national coal board and a district coal board for each of the seven districts into which Great Brit- ain is divided. The national board estimates for several months in ad- vance the amount of coal to be mined during that period, and then in con. sultation with the district boards pro- rates this production to the various districts and allocates the quota to the | mines according to previously deter- mined standards. Wages Important. The matter of wages is. of course, considered as of the greatest impor- tance and is under the jurisdiction of a wage board. Wages are regulated, not in accordance with the selling price, but with the cost of production. The relative shares of capital and labor in the “proceeds” frcm the sale of coal (“proceeds” being the sum left after deducting from the selling price all costs eycept labor) arg 17 per cent to capital and 83.per cent to labor, with a guarantee of a minimum wage. An interesting feature of this scheme is that the miner is definitely interested in Jower production costs. _This plan has undoubtedly accomp- lished its major purpose of pcimitting the great resources .of a nation to be utilized in an orderly fashion of pro- viding living wages to the workers and | | | guarding the interests of investors, con- sumers and the general public. It pro- vides us with a successful working mod- el to guide us in our own planning, _Bui the undertaking which our Na- tion has set out upon is more complex than the British model. The first step of our industrial planners under the | new regime will be to attempt to cor- relate production with consumption. In what may be called normal times, there is some degree of correspondence between productive facilities and the demand for the product, and the amount of output is fairly well regulated by natural economic laws. But the war gave us an excess of productive facili- ties in many industries. Intensive sell- ing methods led to extravagant buy- ing and the speculative mania of the | recognize that prosperity is The planners will also have to take into consideration the matter of prices. This is a delicate subject, as any at- tempt to raise prices conflicts with our traditional viewpoint. ‘The common belief is that if prices are cheap, the consumer benefits, but if an icle is sold at less than it costs, then the workers, investors and ma agers are robbed of their right to par- ticipate in the purchase of other arti- cles manufactured. Part of the task of the industrial planners is to get the general public to only pos- sible when there is a fair return to all concerned in production and distri- PR question of is of f t e guestion of wages is of foremos! importance. There is no dissenting voice to the proposition that what America chiefly needs today is a gen: eral increase in purchasing power. Na. tional industrial planning will have to see to it that this increase in purchas- ing power is actually secured. Hours of* work is a subject that is much to the fore at this particular time. and it is generally agreed that in the present emergency work should {be spread as widely as possible. and that, therefore, working hours should be restricted. Such restriction, ho ever, should be temporary only. Be- cause we have had troubles from over- production, we must not get the idea | that production must be permanently restricted. Such troubles are, on final analysis, the result of overmultiplica- tion of productive facilities and, es- pecially, faulty distribution. In other words, our “overproduc- tion” troubles were due to the attempt to force goods on the market in the ‘wrong way and at the wrong time. Ac- | tually, if production and distribution | had been regulated in an orderly way | during the last three years, we would have produced far more goods than we did and there would have been no “overproduction.” Given purchasing power to corre- spond with a reasonable standard of living, spread throughout the Nation, and proper distribution, it is doubtful whether the present productive capac- ity of the country operated by all our people working eight hours a day | tion to each other lik | of the o] pregnant observation from a very wise | man, the late President Calvin Cool- {idge: “Laws are not made—they are discovered.” Stabilization of eurrencies cannot be made; it can only be dis- ja:ured. More accurately, it can only ! gates to a conference, but onl; ‘wor] | Conditions. And it 16 by o means cer | tain that world conditions are yet at a | point where they can express them- selves in stabilized currencies. The value of a currency in international trade has pretty close analogy to a ther- | mometer. When conditions are normal | | & currency is stable at & certain figure, | precisely as, when a human body is normal. the thermometer is stable at 98.6. What has been going on for sev- eral years in several areas in America | and the world is in truth a process in :;'hich me; lntd governments set the ermometer at a certain figure—ane then expect conditions to conform. The delegates to the London Con- ference cannot, I think, “stabilize cur- rencies.” They can, however, take cer- |tain_steps, do certain actions about | conditions, out of which, ultimately, a | really dependable stabilization of cur- | rencies can come about. I find that the most important delegates to the London Conference understand this. I find President Roosevelt understands it. Consequently there is real hope of rogress. P The national currencies of th at this time run u own 1n ‘Telte | | | | | and down in rela-| e the two monkeys | d?e :)idzlw('!’l the stfk on a s toy. Within eight weel the American dollar in relluign to tlf: French franc has ranged between 82 cents and 100 cents. The British pound —_—— e familiar cl prevent the violation of economicall desirable agreements. But the international phases of our existence dentand more than loose car- tels. Should national planning become operative our foreign trade develop-~ ment would require an extension of the y | | It will be necessary if we are to protect Briefly, our problem includes these factors. We cannot hope to compete arrived at—arrived at, not by dele- | plit much about trade, the conference can take steps by which at least the range of fluctuations would be madified. Stabilization of currencies in inter- national trade, specificaly stabilization of the dollar in trad es stabilization of the dollar at home. Obviously, the dollar cannot-be given a fixed value in relation to the pound so long as the value of the dollar within the United States is subject to violent fluctuation. ~Consequently, a probable, but not now generally foreseen possi- bility, of the London conference is that, simultaneously with the conference, the Roosevelt administration may carry the Gollar to the level it aims at (which is about the level of 1926) and may sta- bilize it there. Only with the dollar reasonably stabilized at home can it be stabilized in international trade. That at a_certain point (expected d | ta be the 1926 level) the dollar is to be stabilized at home—that this is part of the program of the Roosevelt administration is well understood. The “Managed Dollar.” In this connection, there is much talk ol a “managed dollar.” Some think this is practicable. I do not believe that 2 “managed currency” can be perma- nently stable. The managing must be always done, in the nature of things, by a political agency, by whatever ad- ministration. Democratic or Republican, | happens to be in power. I cannot con- ceive any political agency, Democratic or Republican, ever keeping a managed dollar stable in value. On the eve of each campaign there would be a de- mand for higher prices of goods and higher wages, or a temptation to bring about higher prices of goods and higher wages. The alternative to a_managed dollar is a dollar having a fixed relation to gold—that is, containing a fixed num- ber of grains of gold. That is what is fair to expect this Summer—a re- turn of the dollar to the gold basis, but with a lower gold value. Certainly planning scheme be; that is fair to expect, provided the Lon- 5 ey i ad our borders: | qon conference deals. successhully with our own gains and continue world trade, | Stabilization of currencies. The present gold dollar contains 23.22 grains of pure gold. I say “pres- ade to save | quickly the production of coal to meet B e | the needs and at the same time to industry from self destruction. Amer- ican buys(ness is to be revolutionized by legislation—legislation far flung in its scope, dramatic in its basic repercus- | would satisfy our needs. latter years of the past decade made | e do not need lsss production—we need more production. But it must be production that is not effected at a loss, and we also need public purchas- |ent” gold dollar. Actually there is | gold dollar at present. It will be bet- | ter to use the phrase “old gold dollar.” | The new gold dollar, if it is arfived at |and fixed this Summer or Fall, is likely with supplies from the nations work- ing 10 hours a day on a low wage scale and living under lower standards, if we are working 6 hours a day with a minimum wage scale established to pro- SECOND EXTRA SESSIONMAY B ey sideration of tariffs in return for sup- i ing power that can absorb this produc- | vide proper living conditions. More. |0 contain less. How much less, what ) ; ort in stabilization, versa The conference follows the parlia- © or vice versa. mentary forms of the Western World It is assembled to bring about economic peace. [Economic peace is desirable largely because it will prevent war. so naturally here at this convention the pride and pomp and circumstance of glorious war are entirely absent AL this point, the conference has separated into committees. Again we have a paralicl between this assemblage and a national convention of a major political party in America. The im- tant work is done in committees ere, and not on the floor of the general | mssembly. The real jockeying for place here is for position upon committees. French May Have Advantage. Resolution Aimed at Speed. It was a forthr| solution tending to speed up the conforence. The Amer- icans were ba of it And yct the Americans are idealists. They stand at one pole, full of hope; optimism and amiable innocence. At the other pole stand the French, realistic to the point f gloom, and ready for the worst Probabiy in the deadly and devastating tang! which w d affairs have as- sumed since the war, the French would imple s ) and the Ameri- solut simple. The with The mittee. The Amer hit Gov. Cox of Ohlo, British, won a col French. It was a keen ‘The nch may have would vert to the figure nominating conven- tand this conference. h With the passage of the national in- Gustrial recovery measure, an experiment on a vast scale, challenging the basic concepts of our industrial life, is now begun. The system of uncontrolled competition which has so far been re- sponsible for our progress, is to be ended to meet a dire emergency which the very success of the system has cre- ated : | The national industrial recovery act outlines & wav out of the current eco- | | nomic debacle through Government | partnership in groups of co-operating | | industries—with governmental authority | guiding and restraining competition. It | fets up a system of national planning to take the place of ruthless war- fare in which peace is made impossible by our anti-trust laws. And this unregulated warfare causes strous losses mot only to business ;v and workers, but to the tion as a whole. Let's lock at som- of the conditions the act aims to mitigate President May Hav C BY JOHN SNURE. is regarded here as almost an even bet that Congress will be called back in ancther extra ses- sion before next January True, President Roosevelt exerted the utmost pressure to get Con- has gress off his hands, Having obtained from it unprecedented executive powers, ongress in Fall Unless New Laws Show Results. e to Issue Call to terial economic improvement the ad- ministration will be held responsible. Administration leaders are mindful of this fac’, and one evidence is seen in the steps being taken through pub- licity to “sell” the industrial control and public works act, the farm relief act and other proposals to the country. At present, no administration leader tion. In other words, if we plan at all we must plan to co-ordinate, balance | and integrate all the complex factors in our economic life, and seek to ad- vance evenly along the whole front. Interesting Problems Ahead. One of the particular duties of the Control Board at Washington will be to regulate competition between in- dustries. Obviously such competition can be quite as vicious as competition between individuals, and some very interesting problems are going to arise in_this connection. The power of the President to ap- prove the plans prepared by industry, to compel the adherence of all repre- sentatives of an industry to plans when | once adopted, and to impose plans when necessary on industries’ that. fail to plan properly for themselves, is an all-important provision of the national industrial recovery law. The history of the European indus- trial cartels indicates that unregulated voluntary over, we may as well recognize the fact that we cannot over any long period of time ship $300,000,000 worth of goods to other nations and purchase from those nations $200,000,000 worth of goods. We must recognize that there has to be some degree of balance. It comes down to the fundamental question of what products developed in this country can best be sold to meet the actual demand of other countries and vice versa. We are deluding our- selves if we visualize any other pos- sibility through any considerable pe- riod of time. This means that plan- ning must become international as well as national in scope. It means are self-contained and wealthy as to resources of every kind; that some of our neighbors are not self-contained, nor are they wealthy. It means that a new and tolerant attitude must be de- veloped. It means that a scientific comprehension of the position of the several countries must be arrived at that we must realize the fact that we| | number of grains the new gold dollar | would contain, is a subject about which there is fascinated guessing. At pres- ent the value of the paper dollar, ex- pressed in relation to gold, to gold | francs for example, is about 80 cents. Many persons informed in this field think that this is a fair permanent value for the dollar. If so, the new gold dollar would contain about 80 per cent of the old amount. Eighty per metmo‘ 2322 grains would be 1858 gra Held As Surmise. ‘The reader, however, is not expected to take this as more than one sur- mise. Such a surmise must be based jon a combination of elements, and each of the elements is highly dis- |posed to fluctuate from day to day. | Probably 18.58 grains is too high an estimate. ~We know that President Roosevelt has authority from Congress | to fix the weight of the gold dollar at |any point betwesn the present weight, 23.22 grains, and half that, or 11.61 They have the position of rapporteur of the committee, and rapperteur is a sort of floor manager who presents the committee’s Teport to the general con- ference. The chairman of the committee is merely its presiding officer. But Gov. Cox is a bull-voiced, two-fisted catch- ss-catch-can parliamentarian. and may make the American trade worth while ‘We might easily have traded for a blind horse. = Now the committees are appointing subcommittees and subcommittees of subcommittees: again the procedure follows that of an American conven- tion, and here is the odd thing. The finances appropriated by the League of Nations for the conference are meager. Enough has been appropriated to take care of the reports of committees and subcommittees, but sub-subcommittees and subcommittees three and four times removed are likely to be skimped. “They may be reported poorly. The American delegation is really better than it looks. It looks as though 1t aiting for Vice President sThr-ttichotiom to come and take Aeadership, but as a matter of fact a s work is done it must go home to the people for approval—the -people being the nations of the earth— through their parliamentary govern- ments. And here is an odd develop- ment in the modern world. Whatever report this conference makes, however good it may be, that report will have to run the gauntlet, in each of 67 nations, of the upper house of each national congress. In that house the report will be assailed by the vested interests of the nation and the vested interests Wwill trv to arouse the moron minerity by appealing to an inflamed patriotism The wez2kness of the world today and the threat of the collapse of the cap- ftalist system which every nation voiced this week in speeches are not due to | the foreign offices of the world, not to the diplomats, but to parliamentary | government, to senates, to assemblies, to the upper houses of congresses where the sinister influences of poli- tics are intrenched. (Copr i by Nort Paver Alliancegluc.) rmerican News- i There is the situation referred to by President Roosevelt in the cotton goods manufacturing indust A manufac- turer of these goods, who has always endeavored to pay his workers fair wages, finds prices for his product slipping down below his cost of pro- duction. He well knows the reason Some of his competitors are working their employes long hours, paying them starvation wages, and utilizing child labor. What can the manufacturer who does nct want to do these things do about it? To keep his plant run- ning at all, he cuts his costs as dras- tically as possible—and these costs in- clude wages and also profits. In time cvery one in his organization is forced to curtail purchases, which reacts on other businesses and industries, and thus the vicious circle spreads. Had the manufacturer been able to strike at the root of his trouble and prevent his competitors from indulging in practices recognized to be unsound, he and his workers would not have been compelled to join the ranks of the “‘depression promoters.” The soft coal ind iry s, as arc he and his advisers deemed it advis- able to get the legislators out of town before the Economic Conference opened. In this, the President did not succeed though there is no doubt that White House demands have hastened the dis- position of important measures and the ending of the session. Under the ne= amendment to the Constitution the next regular session of Congress will not begin until Janu- ary, instead of the first Monday in December as before. President to Try to Avoid Call. The administration will not bring Congress back in extra session next Fall if it can be avoided. Mr. Roosevelt does not want Congress “on his hands” any more than he can help. The ad- ministration has before i the gigantic problem of putting into administrative effect the extensive list of major acts which, while clothing the President with vast powers, also throw on him almost unlimited responsibilities. 1t can hardly be questioned if ‘the country goe. a either at the Capitol or in the executive departments would admit that another extra session is likely, but in the last week or 10 days there has been in- creasing talk in congressional circles about the likelihood of returning here in September or October. Republicans Predict Extra Session. Republican jeaders are saying opénly that they would not be surprised to co-operative arrangements | between industries are rarely satisfac- | tory to either the industries themselves or to the general public. The indus- trial cartels are associations of pro- | ducers formed for the purpose of regu- lating their business along such lines as the control of production, the ap- portionxent of output and the main- tenance of prices. The life of a cartel is rarely more than a few years. Sooner or later have Congress reconvened next Fall. | either some member flndamuu-mtemt Such feeling is based on the belief that | stronger than ity interest in the group I e | and violates its engagements, or_out- the next two or three months will side companies spring up, and, being demonstrate that some of the legisla- | able to take advantage of the benefits tlon which turns enormous authority | of the group’s restrictions without in- over to the President will prove un- curring corresponding obligations, they workable. £ undermine the situation and force the This applies especially to the indus- | dissolution of the cartel. trm cotnl.n;: a‘gd public worrl::l :12:’ D; Furthermore, while cartels have rather to the industrial conts le of rmed the measure, and to the farm market- i D ohiccivas tabiare docia ing act. To some extent, it applies 10 | ey e 18rEe m]umyd:n"be‘::rt:g selfish in’ thelr intent and part of the other legislation, such as others. the home loan act and the farm mort | fhm e ong Exploitation of s | there something m | gage refinancing legislation, the emer- fmdo:uz :‘hn Il:d cambu:: %‘o:egf (Cont.nuzd wa Thiva Fpge.) ment mus&tcn‘.rol the plans and must | { and that this entire subject must be developed along national and well- thought-out lines. To carry out these far-flung plans requires vision, determination and hon- esty. 3 What we should have, and eventually will have, will be what may be termed a supreme court of industry, selected from the industrial community, witi the same care from the standpoints of ability and integrity as we now select the membership of the Supreme Court of the United States. We may have in addition industrial district courts to rule in local phases. There will be many problems to con- front any such organization. I rather dread to think at present of the com- plication of problems, tremencous .in scope and in number, which passage of this bill immediately brings up. and upon the wise solution of which rests our industrial future. But it can be worked out no more excuse for a dis: | grains. He is not authorized to go below half. We know further that this authority was given the President, at his request, largely in anticipation of the present international conference. We know the principal aim of the con- ference is stabilization of currencies. We know that stabilization of curren- cies for purposes of international trade can only be accomplished if accom- panied by domestic stabilization. In this set of conditions there is strong reason for stabilization of the dollar {at home to be attempted during the Summer and Fall, while the conference is in session. Conditions within the United States would suggest for the new dollar a weight about 60 per cent of that of the old dollar. The objective aimed at by the Roosevelt administration, for do- mestic_purposes, is the 1926 price level of goods. To attain the 1926 price level | of goods the dollar would need to have T:;:rt is | about 61 to 65 per cent of its present dustry than for a disorderly individual| e Sein Cehoid nt Ofate €9ld In the 1 old dellar would b= or a disorderly community ef indi- | 5 o= .viduals. ,lxalmt a former 23.22 g