Evening Star Newspaper, December 9, 1936, Page 11

David Lawrence. ‘Easy Money’ . Policy Seen Permanent Low Interest Rates to Stay in Controlled Economy. BY DAVID LAWRENCE. ' ASY MONEY,” a phrase of E the headlines that doesn't mean what it might seem on first impression, is ap- parently to be a permanent part of the Federal Government's policy. It means that low interest rates on Government se- curities has be- come and will re- main for some time to come a definite part of controlled econ- omy. It means in & nutshell that the Gov- ernment of the United States ar- tificially controls the rate of in- terest iv intends to pay on the sums it borrows presumably from the public but in actuality from the banks which in turn are now pretty much under Government control. Is this an unhealthy situation? What effect will it have on future business conditions? The questions are pertinent, indeed. ‘The argument in favor of an “easy money” policy or low interest rates for Government securities is that what the Government does affects indirectly the whole gamut of interest- bearing securities all the way from bonds of big corporations to “the mortgage rates in small communities. Low interest rates are deemed by their sponsors to be essential to a recovery movement. Danger in Rate Rise. Also the Treasury naturally wants to finance at low rates so that the cost of the total interest item in the Federal budget will be kept down. But even if the Treasury were through with its borrowings, there is a danger In allowing interest rates to go higher. If Government bonds fell off in any eonsiderable number in price, the eapital of many banks might be im- paired. Here is how the National Industrial Conference Board in its latest bulletin speaks of the “easy money” policy, contending, inci- dentally. that rates will be kept down to avoid dangers such as these: “A decline comparable to that in the immediate post-war period would, of course, seriously affect the surplus and the capital structure of a large number of banks, and would no doubt tause a large number of insolvencies. In the event of a tightening of inter- est rates, the Treasury might attempt to support the market for its own | eecurities, but in the absence of an easy-money policy, it may be doubted | that this approach to the problem would be successful.” Perhaps the most interesting com- mentary on ‘“easy money” policies is that of Prof. Edwin W. Kemmerer of Princeton University, who. in a| speech before the American Finance | Conference in-Chicago on November | 18 last, said: “During the early part of a strong mflationary movement, interest rates are temporarily depressed. The mar- | ket is glutted with money and bank eredit * ¢ ¢ More Money, Higher Prices. “After such a period of temporary glut and of low interest rates, grad- ually the increased supply of money and of bank credit make themselves felt in rising prices. The velocities of | monetary and bank deposit circulation | are greatly increased. Then, when commodity prices once get into full swing on the rise, they pull up with them the interest rates. “A strong seller’s market is created. | This gives an artificial and feverish | stimulus to business, greatly Increases the demand for capital of all kinds | and pushes up interest rates.” ' Then what happens? Prof. Kem- | Sir . . . Give Yourself News Behind the News Admininntion Prepares to Turn Red Light Against Boom in January. BY PAUL MALLON. HE din of boom is 30 noisy as to deceive a casual listener into be- lieving the boom itself is now at hand. The strength and extent of price advances encourage that premature deduction. The official Government price chart (Lubin) hit a high of 82.6 per cent of 1926, on the rise, for the last announced week (ended November 38). Pondering New Dealers see in-these signs not an arrival, but an advance notice. They are doing nothing openly except crowding the stock market through the increased activity and watchfulness of the Securities and Exchange Commission. Trustworthy information indi- cates they will let the situation move along this course until Jan- uary. The Federal Reserve Board will then probably increase reserve re- quirements again. The President’s legislative and budget messages and his second inaugural also may simultaneously contribute a sedentary effect. chime in with conforming action. These things may be only of immediate moment. When economists here talk of boom they generally speak in terms of six months to a year. LR It was not so much the decisions of the Supreme Court this week, but the unanimity of the justices in making them. The New Deal positions in the holding companies’ procedure and telephone regulation were upheld unanimously. Naturally, legal beagles here are sniffing significantly at these hints of the correctness of Mr. Dooley’'s assertion about the court following the election returns. On the advice of the best of counsel, it may be related that what the court seems to be. doing is to resolve minor doubts in favor of the Government wherever possible. The cases rcally were not important. That is, they did not present fundamental consti- tutional questions, but only temporary issues of procedure. When the cases are presented for final constitutional judgment you may be certain there will be far less unanimity. Politics is a peculiar business. Certain extremely enthusiastic New Dealers (not President Roosevelt or any one speaking officially for him) are talking about cracking down on the press if*reprisal for some unfair- ness in the last campaign. The question of what is unfairness in politics has never been decided officially. It may change from day to day. The best example of that is the grating predicament in which Repre- sentative O'Connor, candidate for House floor leader, has caught himself. When Vice President Garner began working against O'Connor last week, O'Connor came out with a statement denouncing the unfairness of sena- torial interference in a strictly House fight. But his opponents immediately made public a letter he had written November 24 to Senator Clark of Missouri, soliciting “any assistance you may see fit to render me through members of your delegation, and other members of the House.” It is quite possible that, if Mr. O'Connor obtains enough senatorial interference to win, he will again consider the practice ultimately fair. Unfairness in politics seems to be whatever ,is done by your op- ponents, Fairness is whatever you do. * % ok % A little line in the London dispatches about a Fascist demonstration in front of 10 Downing street caused many an official eyebrow here to arch. ‘The incident confirmed suspicion that the Simpson affair is not an issue of love, but of politics. The British Fascists were quick to take advantage, almost as quick as Winston Churchill. Mr. Churchill, as a statesman, is generally regarded here as a good = historian. His basic trouble is said to be that he has fallen short of attaining the British premiership on so many occasions that the matter is constantly inspiring his imagination. Mr. Baldwin is still the strongest man in British political life, but not strong enough to face an issue of king versus anti-king. <ound Brit- ish statesmen will work to keep the situation from getting around to that issue. An unofficial subconference of the Pan-American peace meeting may shortly be held here at the basement bargain counter. Negotiations toward a Chilean treaty are very active. Also there 1s some activity toward Peruvan and Ecuadorian treaties. Nothing is doing yet on Paraguay and Bolivia. The troublesome Argentine treaty problem also is said to be still on the shelf. The United States now has trade treaties with these Pan-American delegations: Brazil, Colombia, Haiti, Cuba, Costa Rica and Nicaragua. There will be more announced shortly after the Buenos Aires meeting concludes. Trade has become the most important phase of peace. (Copyright, 1936.) e e s L e e e merer points out that it is almost im- possiole for a government to main- tain low interest rates. He says: The Treasury may also United States from 1915 to 1920. “From the standpoint, therefore, of | which would be violated if he did witness our own experience in the | “Whenever as a result of a gov- ernmental cheap money policy, a strong upward movement of commod- ity prices gets into full swing, the economic theory and financial history the evidence, I believe, is strong that | this country in the not far distant | future will experience a period of ris- | ment can stop. As well try by gov- policy breaks down, because it in- creases the momentum of rising prices and tends to engender a flight from the dollar. “All this causes an upward swing of interest rates that no repressive measures on the part of the Govern- ing interest rates.” (Copyright, 1936.) ernmental action to prevent the tides from rising under the gravitational pull of the moon. Witness the ad- vances in interest rates that accom- panied the post-war inflation of Cen- tral Europe, or in much milder form Whatever D. C.,” WEDNESDAY, -DECEMBER - 9,- 1936. 'HE opinions of the writers on this page are their own, not necessarily The Star’s. Such opinions are presented in The Star's effort to give all sides of questions of interest to its readers, although such opinions may be contradictory among themselves and directly opposed to The Star’s. We, the People. Observer Sees General Election Neatly Sure as Result of Simpson Affair. BY JAY FRANKLIN. ET us now, with that calm de- tachment which comes to us so naturally when we consider re- mote events which we do not fully understand, take stock of the constitutional crisis in England. Whether King Edward VIII abdi- cates or the conservative cabinet re- signs, or both, as a result of the King's friendship for an American woman, only an innocent would imagine that the crisis is solely a matter of associa- tion between him and & foreign-born divorcee. It was not the straw which broke the camel's back, but the heavy load which preceded that final straw. England—like America France and Spain—faces a general crisis in democ- racy. Even Russia has promulgated a new constitution. In Spain, they are| arguing over details with bombs and | machine guns. In France, there is a | tension so grave as to paralyze French foreign policy. In America, Roosevelt is about to close with the Supreme Court's power to check national reform. In England, in 1935, the conservatives stole the Labor party's proposal to keep Mussolini out of Ethiopia by the League of Nations, won the election | and then backed down before Il Duce. By this trick, the old guard kept the Labor party from coming into power. When Edward VIII succeeded his father, he was known to have a pro- nounced sympathy for the British un- jer-dogs. In particular, the fate of the Welsh coal miners excited his compas- sion and he publicly announced his will to help them. Since some of the great conservative peers live on coal royalties, this was not taken in good part. So British society is playing m; strongest card against its royal leader: Middle-class morality and the non- conformist conscience. British society adopted its present code of morals as | part of the process of reconciling the dominant middle classes to the con- tinued existence of the nobility. It is impossible to escape the con- ciusion that the conservative leader and the great newspaper proprietors have been forcing the matrimonial | issue on King Edward. There is no possibility of his marrying Mrs. Simpson before April—when her di-i vorce become absolute—and no law marry her. While we can easily im- agine our own alarm if a bachelor President should propose to marry a foreign divorcee, Mr. Baldwin's will- ingness to force the issue before it arises suggests that the real conflict in England lies far deeper than the marriage question. After all, Vic-| toria married a foreigner, other Brit- | ish Kings have had lady friends. and the crown’'s political power has be- come mainly symbolic. | It is probably because the old guard | . fears lest Edward assume the leader- ' ship of the British masses in their desperate desire for social justice and | economic democracy that they have | thus fouled their own nest.. The/ King's recent speeches to the stranded | Welsh miners suggested that the crown might start a constitutional new deal in England and curtail the patrician privileges of the upper classes—including the all-powerful newspaper lords. | The immediate consequences uei pretty clear. Whatever the King does, | you choose at Raleigh will be o gift of good taste and a token of good will. QUALITY gift thet you will send with pride, that it will be received with pleasure. A KNOX HAT Give “Him” a KNOX If sen you don’t know his size, d a Gift Certificate. It en= ables him to pick out his core rect size at his convenience. It comes in a miniature of the Knox box. KNOX ¢“5th AVENUE” Made of finest Knox quality Felt, it boasts subtle lines and hand-worked i . bound-edge or raw-edge. In “Ovalized i ¥y Sixteenths,” meaning that even if you bounced we can fit $7.50 OTHER KNOX HATS, $5 TO $40 on your head as a baby, you perfectly _ (A) ABOVE: trousers, $10.95 * (B) RIGHT: Parking Service at Our Curb . . . Private Chaufleurs Charm ond chic in RALEIGH HABERDASHER \Wadkington's st Mo's Whes Strne 1310 v o287, . It will be a confident (C) ABOVE: “Black Beauty,” a Flannel House Coat with brilliant leather belt; also ';MK:g * (E) RIGHT: “Very truly yours,” says this Flannel Robe with HER imi- tiols. A gift she'll wear and care 95 England can scarcely escape a gen- eral election. Particularly is this true should he abdicate. The mere fact of his existence as a private personage—either in England or on his ranch in Canada—would give the British masses a convenient symbol: A King who tried to help them was promptly thrown overboard by the “economic royalists.” His presence in Canada would weaken the bonds of empire, and the British could scarcely send him out of the empire with a light heart. ‘This means an early political battle in England itself. The conservatives look on Hitler, Mussolini and Gen. Franco with a certain amount of im- perial sympathy, and a British Fascist movement is far from out of the question. On the other hand, the masses of the British people sympa- thize with popular front governments elsewhere and are sincerely anxious to cultivate their own garden with- out too much worry about the em- pire—which is so often offered as a reason for avoiding needed reforms at home. And Roosevelt has shown what happens when the “have-nots” vote against the “haves” in an Anglo- Saxon country. As hinted in the London press the White House has indicated its dis- approval of the Simpson marriage. This unusual intervention in the do- mestic affairs of the British King took the form of the executive order of November 28 forbidding American diplomats to marry foreign wives. The order was originally designed to stop Mrs. Ruth Bryan Owen | Rohde from returning with her Danish husband as Minister to Den- mark but its timing and phraseology, particularly those sentences describ- ing the matrimonial self-sacrifice re- quired of high public officials, were in response to informal British repre- sentations that the London govern- ment would appreciate a helpful hint from the White House. (Copyright, 1936.) SR CHILD LECTURE FRIDAY Research Unit to Present 2 Ad- dresses in C. U. Auditorium. The Center for Research in Child | Development will present the second in a series of 10 lectures Friday at 8:15 p.m. in the auditorium of Cath- olic University. Speakers will be Miss Regina Flannery of the department of anthropology at Catholic Univer- sity, and Rev. Edward Ward. Miss Flannery has made extensive studies of child-parent relationships among the North American Indians, while Rev. Ward has spent the last six years among South African tribes. Raleigh Haberdasher cordially invites you to open a Charge Ac- count. Pay in 30 days or use our Extended Payment Plan.. . No down payment, no in- terest charges, 4 months to pay. (D) LEFT: B slim and gvelte in this Celanese Taf- feta Hostess Gown. Close-fitting bed- ice . o . flaring skirt ... $12.95 (F) ABOVE: “How nice of you" she will soy when you present this heavy Satin Neg- ligee 14.95 SWEATERS.- --._$3.00 to $10.95 HANDKERCHIEFS. HANDBAGS. SLIPPERS .. SATIN SLIPS....._$1.95 to $7.95 THE WOMEN'S SHOP . . . RALEIGH HABERDASHER b ' This Changing World Commissioner Hazen Finds He Holds Lord Mayoralty of Washington. BY CONSTANTINE BROWN, the throne crisis in Great Britain engages the attention of five continents and overshadows all other important issues, German and Italian troops have slipped quietly into Spain and are ready to help Gen. Pranco’s final push against Madrid. Despite official denials that soldiers of the Reich or Italy are on Spanish territory, there is definite proof that subjects of the two die~ tatorships have landed in Spain in large groupes. Meantime, equally reliabls reports indicate that some 5,000 French citizens have managed to smuggle themselves over the frontier and are . fighting in the loyalist ranks. y Whether they have left Prance with the tacit consent of the gov- ernment and been accompanied by officers of the line, is a matter which cannot be ascertained at present. The French government has not the same means of con- trol over its citizens as have the ‘v u,mc AN dictatorships. \ NEUTRALS // In any event, we may witness = 4 within the next few weeks the first German-Italian-French-Russian encounter on Spanish territory. * % * % ‘Washington has a Lord Mayor, but few people know it. It is Com- missioner Hazen. He did not know it himself until he was told what an exalted position he holds. This is the story: Some time ago the British admiral commanding the West Indies squadron came to Washington to pay his yearly visit. During a recent visit the British naval attache, who makes the pre- liminary preparations regarding the protocol of these visits, went to see the American official who maps out the rounds of visits, entertainments and so forth. * ok ok X This American official informed the British naval attache that while the question of the admiral paying his respects to the President is a matter between the Ambassador and the State Department, it was essen- tial that the first visit should be paid to the District Commissioner. “Why?” asked the somewhat astounded Britisher. “It has never been done before.” “That may be so0,” was the answer, “but when American naval vessels go to Portsmouth or to London, our naval officers are required to call first on the Lord Mayor. And Mr. Hazen, although called only a Commissioner, is our equivalent to your Lord Mayor.” ‘The Britisher swallowed some- Wwhat dryly, but cowld not help himself. The admiral was in- formed that he must call on Washington's Lord Mayor. He had, of course, no objection. When the day arrived, the offi- cer in charge of arrangements rushed to the Commissioner’s office and informed him of the facis in the case. “I know you have a cut-away and a silk hat,” said the American official, “ aide.” “Of course not,” said Hazen, “but I can get a police officer in my front room, if you think that a uniform is mecessary.” The official rushed to the War Department in search of a smart, bemedaled officer, but none was available for that duty. The Navy Department was more helpful. Maj. John Halla, a typical fighting Marine, with enough medals to go around his chest and waist, was de- tailed as military aide to Commissioner Hazen for 24 hours, * Xk ¥ % On the appointed day, the British admiral with his aides. all in regulation uniforms, called at the District Building. In Mr. Hazen's ante- room Maj. Halla had established his headquarters. He was in service uniform and looked business-like with a mountain of paper at a desk. He ushered the Britishers into the Commissioner’s room. The visit, according to protocol, should not have lasted more than a few minutes. The admiral stayed over half an hour. Like many British naval officers, he was keenly interested in horses. And when he saw on the Commissioner’s walls pictures of fine stallions, and dis- covered that Mr. Hazen's hobby was horse breeding, they had a hard time to get away from each other, so thrilling was the subject of their conversation. A few hours later the Commissioner, frock-coated and silk-hatted, returned the admiral's official call. This time Halla had his blue uniform and his rows of medals. Mr. Hazen received a gun salute and was piped aboard while a guard presented arms. He h3d become a full-fledged Lord Mayor and was received for the first time in Washington's modern history with all honors due to the incumbent of that high civic office. Prize Writer Was Failure as Reporter Prof. Shepard Would Not Carry “Garcia” Message. BY LEMUEL F. PARTON. EW YORK, December 9. —Some commission or alphabetical agency with power to act ought to do something about Elbert Hubbard's “Message to Garcia.” It has led many young men on false paths. Here's @ man in the news to- day, getting money and fame because he was immune to it in his youth when most other lads were infected. He is the intimate friend of my youth, Prof. Odell 8hepard of Trinity College, winning the Little Brown & Co. prize of $5,000 for his biography of Bronson Alcott. He is the author of many books, distinguished as a teacher of English, highly placed in American letters—and they hand him a sabbatical year on the slightest provocation. Which, for definite rea- sons, I believe is because he wasn't a message-to-Garcia man. It has to do with a certain turning point in his career, He was the handsomest man in Northwestern University, known as “the Bard” because he was, inci- dentally, a poet, as well as & musi- cian. He wore a Lord Byron tie, car- ried a stick, with a rapturous up-tilt of his chin and a look of Olympian preoccupation which gave him high visibility among the corn-fed North- western undergraduates. I got him a job on the Chicago Tribune, covering the blue-stocking North Shore. Johnson, Howie, Wal- ter Burns and a few other raffish characters were rehearsing for Hecht & MacArthur's “Front Page” of later years. “The Bard” moved among us with amused detachment. There was a double murder in his territory. No word all day from “the Bard.” The high command profanely held me accountable for having dragged him in and ordered me to dig him up. pronto. It was not until midnight that I reached him by tele- phone. He explained: “I investigated the matter. It was a sordid affair. I ascertained that the city press was delivering all the es- sential facts. There was nothing more that any civilized newspaper should want or in which any reader of taste or sensibility should be interested. ®o, naturally, I paid no more attention to it.” When he was cleaning out his desk drawer the next day, preparing to go to Harvard for his Ph. D., he said his action had been quite deliberate and he had no regrets. He made it clear that he intended to sink his life in what interested him, weighing and selecting his own values. One could find more interesting double murders in Sophocles or Shakespeare than he could in Chicago. He went his way, | winning not only this, but other prizes, while the febrile “Message to Garcia” | news hounds were lucky if they | snagged an imitation gold watch on la cigar store punch board. (Copyright, 1936.,) PLAY SAFE ... INVEST IN QUALITY! RALEIGH HABERDASHER 7[ :,u inylen ’J cjt'nuf ~ / /m '4 C? Z/mx :-S/cu 1310 F STREET. ) - \ Warmth Without Weight . . . 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