The Dollar's Week

President Roosevelt knows many ways of spending Sunday evening more pleasantly than conferring with monetary experts. Yet such conferences have become almost a habit for the reason that Sunday is convenient for considering the past week's money moves, planning the next week's moves. Last Sunday evening Secretary Woodin, long an absentee because of illness, was on hand again. So was Eugene R. Black, Governor of the Federal Reserve Board, George L. Harrison, Governor of the New York Federal Reserve Bank, Henry Morgenthau Jr. of the Farm Credit Administration, Chairman Jesse Jones of R. F. C., Henry Bruere (president of Bowery Savings Bank), the President's financial liaison man, Fred I. Kent, foreign exchange expert, and two theorists: Professors James H. Rogers and George F. Warren. Such serious things had they to consider that the nine guests spent three hours in deep conference at the White House.

Professor Warren was the guest least known to the public and the one whose ideas were the chief subject of debate. Newshawks can keep no track of his daily comings and goings. Most of last week Ithaca newshawks had the impression that he was in Washington and Washington newshawks thought he was at home teaching at Cornell. Not a member of the original Brain Trust, he kept even his Washington office a secret and by habitually slipping into the White House through the garden he avoided letting any one keep tab on him while he kept tab on the way his theories were being put in practice.

The President's Sunday evening was centred in Professor Warren. The second week of R. F. C gold buying abroad (to reduce the gold value of the dollar) had brought noteworthy results. It had driven the value of the dollar down, the price of sterling up from $4.78 to over $5 (to $5.16 at one time). This success was almost more than bargained for. It started a flight from the depreciating dollar. Foreigners called home their dollar balances, Americans rushed to exchange dollars for foreign money. At one time the exchange value of the dollar actually fell below the domestic value (set by the R. F. C. gold price). What was more, fear of inflation for the first time seriously pressed down the price of U. S. bonds. Last week most important U. S. issues sold below par. People who had subscribed for new 4 1/4-3 1/4% bonds on Nov.1 at101 1/2 found them selling at 99--an ill omen for future Government financing. With the new bonds selling at a discount conversions of 4th Liberties practically ceased, thereby threatening failure of the refunding operation.

These things seriously worried Messrs. Woodin, Black and Harrison who were concerned about the Government's credit, who knew that if the Government could no longer sell bonds there was no way of financing its new expenditures except direct inflation. No small decision did the President have to make, for his advisers were drawn in different directions.* He well knew that Harvard Professor O. M. W. Sprague, onetime adviser to the Bank of England who had come over last spring to act as his adviser, was considering resigning as a protest against the policies afoot, that financiers in London were accusing him of "playing a gigantic poker game" with the dollar; that in Paris famed Economist Frederic Jenny was prophesying, "Not far distant is the fatal moment when Mr. Roosevelt will be faced with the dilemma of chaotic inflation or a return to dollar stability."

Not dispirited were Professor Warren and the cheap dollar advocates. Some of them even suggested that big Manhattan banks might be dumping U. S. bonds to scare the Administration away from its gold-buying policy. Some of them were willing to let the price of Government bonds sink for a time. One fact everyone at the conference had to face: that last week confidence in the dollar had been badly shaken, the public if not scared had at least shivered. Result: a reaction toward "hard money."

In Chicago 26 business bigwigs including such men as Sewell Avery, John V. Farwell, Albert D. Lasker, Alexander Legge, Col. A. A. Sprague, E. L. Ryerson Jr., Thomas E. Donnelley, were issuing a manifesto against Inflation. The Crusaders, who have found their Holy Grail. Repeal, announced a new crusade: against Inflation. Even inflationists began to trim their sails when they saw the Government's credit threatened. Senator Elmer Thomas was declaring: "There need be no fear of printing press inflation. . . . With gold adequately repriced the problem of future stabilization is simplified. . . . Our currency system must support business on a scale that will insure profits."

All these influences were represented at Mr. Roosevelt's conference. Even if he felt more inclined than before to caution, the President did not decide to abandon Professor Warren's ideas--not at least till they had had some further trial. Monday morning the R. F. C.'s gold price again was given another boost, was set at $33.45 (equivalent to a 61.79 cent dollar) and the dollar once more started down in foreign exchange.

P: Last week Kentucky became the sixth State whose unemployment relief had to be taken over entirely by the Federal Government.* Simultaneously, President Roosevelt announced the creation of a Civil Works Administration under the supervision of Relief Administrator Harry L. Hopkins. CWA will take $400,000,000 from the Public Works fund, $150,000.000 from the Relief Administration, release 2,000,000 men from local and State relief rolls at once, put 2,000,000 other unemployed to work by Dec. 15. CWA workers will be employed on small local projects (playgrounds, sanitation, pest control, repairs), will work a 3O-hr. week, will receive until Feb. 1 approximately $50 a month.

P: A visitor at the President's office was Representative Samuel Dickstein, chairman of the House Immigration Committee who comes from Manhattan's lower East Side and is celebrated for formulating kosher food laws. He had just initiated, at a secret session of his committee, a Congressional investigation of Nazi propaganda in the U. S. Asked if the President had approved his enterprise, Congressman Dickstein replied: "We are going ahead with the inquiry. You can draw your own conclusions. . . . The revelations will shock the nation, as did those of the Captain Boy-Ed and von Bernstorff episodes in the days when Fate was pushing our country to the threshold of World War participation."

While the Federal Government was still looking for Heinz Spanknoebel, accused of operating as an agent of the German Government without notifying the State Department (TIME, Nov. 6, 13), it was announced from Berlin that Col. Edwin Emerson of New York would officially represent the Nazi Party in the U. S., a position which Spanknoebel had pretended to. Col. Emerson, oldtime newspaperman, wrote propaganda from Germany which was distributed to English-speaking troops during the War. Simultaneously another Hitlerite arrived in the U. S. He was Captain Georg Schmitt, who will tour the country consolidating the U. S. members of the Stahlhelm (German veterans organization) into a national society, will explain Naziism to German-American groups. On the side, Captain Schmitt hopes to write a few orders for his father's winery. C. Declaring "we must do our part to keep the Red Cross ready, day or night, for service," President Roosevelt opened the society's annual roll-call. C. To the White House came a jubilant troop of Pennsylvania Democrats to bring the President tidings of last Tuesday's mayoral victories for the party (see p. 16). The President congratulated young William N. McNair on being first Democratic mayor of Pittsburgh since 1905.

*Next day Secretary Woodin emphatically denied that he or other Treasury experts were opposed to the President's policies. The well-known fact remains that the Treasury and Federal Reserve group favor hard money, look upon the Warren experiment with misgivings. --The five other helpless States: Georgia, Florida, Louisiana, Mississippi, Arkansas.

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