A BOLD DASH

Evening Post, Volume CXVI, Issue 35, 10 August 1933, Page 10

A BOLD DASH

*THE ROOSEVELT POLICY

ARE THE BRAKES SOUND ?

"Gan the jockey prevent the horse from bolting?" is the question raised by Booseveltian inflation, as seen by A. Ingle Hall in the "Sydney Morning Herald." The policy, he says, "is a bold gamble in a land where speculative tendencies are übiquitous and'unrestrained. "Controlled inflation imposes a tremendous responsibility upon the banks, and the American banking system is incomparably bad. Thousands of banks have failed in the last few years, involving the loss of millions of dollars of the'people's',, money. In a striking number of instances failure was due to lack of competence and. integrity on the part of the bankers, There have been appalling disclosures, of corruption and dishonesty by high executives' in some of the most important financial institutions in the country,5 and though ! Congress has applied itself to weeding out the worst, offenders^ it will be many years before the American banker will 1 be regarded with the same confidence and esteem as his prototype in other lands. Another, vita! defect is that the- influence of the Federal Beserve Bank is limited, and does not permit of effective control of a vast inflation scheme. Speculation is rampant in' all strata of. society, and the soil itself is valued less for its productivity than as a basis'for mortgages and a source of unearned increment. Government intervention in industry is now the policy, of the Administration, but the failure of the Farm Board' to handle wheat marketing does not augur well for the success of further interference with private enterprise. It is in such an unfavourable atmosphere as this that President Eoosevelt's schemes for world: recovery must "be matured."'' " ' "Several other vital considerations jeopardise the prospects of success. In the £rst place, the rise of prices already, begun, in the United States is mainly a matter, of nominal values. It it not accompanied by extending markets, as was the case in Great Britain during the last year, nor are these assured. Resting, as it does, entirely on confidence, any untoward eventual-. ity may bring the whole credit, structure ■ tumbling' like a house of .cards, and the ensuing repercussions \vouid be of world-wide "incidence. Furthermore, it is a rise of world prices in harmony that is-required, rather tliSn a competitive ' jockeying for nation.il advantages, and the_ recent American policy of' sauve gui pout is not encouraging." . .