MR ROOSEVELT AND THE WORLD CONFERENCE

Otago Daily Times, Issue 21989, 26 June 1933, Page 10

MR ROOSEVELT AND THE WORLD CONFERENCE

, TO THE EDITOR. Sir, —There seems to be an inability on the part of many New Zealanders to understand America’s attitude at the World Economic Conference, particularly in regard to currency stabilisation. Mr Roosevelt has stated his policy quote often in his speeches and in his book, “ Looking Forward.” His policy is quite sound and easy to follow. He realises that if bis own country and the world are to be saved from complete collapse prices must be raised. In his broadcast speech in May Mr Roosevelt said; “ I have the definite objective of raising commodity prices to such an extent that those who borrowed will on the average be able to repay money with the same kind of dollar which they borrowed.” Mr Roosevelt proposes to control , prices by controlling money. To use his own term, he has expelled the high priests of money power from the temple of democracy, and he intends to keep them expelled. Hbw can Mr Roosevelt raise prices? You must have assets to finance on. Having got those assets' their value depends on their price. The value of, a mob of sheep is determined by the price of a sheep. And price is determined by the amount of money in circulation. The most important part of this statement is “in circulation.” Mr Hoover failed because he did not realise this fact. He iSsucd’vast quantities of money,’ but issued it to banks and financial houses to hoard or speculate with. Mr Roosevelt is going to put his money in circulation in ways— {1) by raising the farmer’s income; (2) by raising wages, and (3) by spending huge sums on useful and necessary public works. ' Unlike Mr Hoover, who encouraged the unproductive use. of money in speculation, Mr Rdosevelt is going.to force this money into useful circulation by exercising a very close and thorough control over new company promotion. He desires the world to co-operate with him. , If the other statesmen will do so he will cancel the war debts, stabilise his currency, and reduce his tariffs. He is determined not to tie himself to a world that persists in ..its late madness. If the ■ other statesmen will not assist him to raise prices he dare not reduce his tariffs, for if he does he will not be ablq to raise his internal I prices. He dare not .tie himself to' gold or his raised internal prices would lose him his export market. That is what happened to Great Britain when she went back on to gold. In fact, if he tied himself to gold now he could not raise his internal prices in defiance of the world and succeed. If the European nations reduce their armaments, America can reduce hers and so have more money available for her public works schemes. And, lastly, war debts. If the nations co-operate and assist Mr Roosevelt to raise prices then he will be able to overcome the opposition in America. Prosperous people will not worry about war debts. Moreover, if America is forced to act alone in raising prices,' she can use her war debt payments to maintain a favourable trade balance—in theory at least. Rather than.blame Mr Roosevelt we • should blame the other nations for refusing to assist him. My own opinion is that there is every chance of the conference being as barren of real results as its many predecessors. I am also of the opinion that whatever happens to - the conference the controlled inflation in America is going to save the world from complete collapse and inaugurate an era of prosperity.—l am, etc., Ruseveld.