Middle-of-the-Roader

THE MONEY MUDDLE--James P. Warburg--Knopf ($2). In London last July when President Roosevelt torpedoed the World Economic Conference from the U. S. S. Indianapolis, James Warburg was one of the young advisers who went down with the U. S. delegation. Back in Washington Adviser Warburg spent a futile hour trying to make the President see the error of his ways. After that Mr. Warburg ceased being an adviser. The Money Muddle is his full-length attack on the financial abracadabra of the New Deal. "In the hope that he would have liked this book" it is dedicated to his father, the late great Paul Moritz Warburg of Federal Reserve System fame. It represents a not too conservative banker's criticism of the Roosevelt monetary policies. Wrong is the gold-buying policy: it has already been proven ineffective. Wrong is currency manipulation: it destroys credit, does not raise the right prices. Wrong is silver monetization: it will not help anyone but the silver miners. Wrong is economic nationalism: it would take 50,000,000 acres of farm land out of cultivation. Wrong are the Securities Act and RFC bank control: even worse than a banking system run by privateers is a banking system run by politicians. Wrong is the Gold Reserve Act: it weakens the Federal Reserve System, sets up nothing in its place. Wrong is the effort to raise prices to the 1926 level: it is not the height of prices but their relation to each other that matters. Most wrong of all, in Mr. Warburg's estimation, is the lack of any decision as to where we are going. Right and alone right is a middle course of internationalism, based on lower tariffs and a return to a better gold standard. Right and most necessary are intelligent laws on banking, taxation to redistribute wealth, old age pensions and unemployment insurance. Our present situation is a hangover from the "physical, moral, and financial drunk" we have been on ever since 1914. We need fewer monetary doctors, more hard work, and above all, no more panaceas. Winding up his 272-page warning, Author Warburg offers urbane but left-handed benediction to his onetime chief: "Whether the Roosevelt program leads us to recovery or chaos, to widespread prosperity or national ruin, let no one say that Roosevelt lacked the courage of his convictions. . . ." The Author-- James Paul Warburg, 37, is vice chairman of the Bank of the Manhattan Co., co-author with his wife Katherine ("Kay") Swift of "Can't We Be Friends?" and "Up Among the Chimney Pots." Born in Germany and educated at Harvard he did much of the early spadework for the London Conference. Since his exit from the national stage, he has been a prime leader in the fight against inflation.

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