anaheim-gazette 1933-08-31

THE ANAHEIM GAZETTE HENRY KUCHEL, Editor and Publisher ESTABLISHED 1870 ISSUED EVERY THURSDAY SUBSCRIPTION PER YEAR ... $2.00 SIX MONTHS ... $1.00 Entered at the Anaheim, California Postoffice as second-class matter. MANAGED CURRENCY We have heard a great deal of late of a managed currency system in the United States to take the place of the "old fashioned" gold standard and we have been informed at Washington that members of President Roosevelt's brain trust, including Professor James Harvey Rogers, and Professor George Frederick Warren, have had assigned to them the task of studying the theory of managed currency and its practical application in the United States. The study of money and finance is one of the most complicated that can be undertaken. There are disagreements even among the proponents of the theory itself as to just what "managed currency" means and how it can be brought about. Doubtless the system will require a great deal of study. It seems to be the theory of the majority of the managed currency experts that when the prices of commodities get out of joint it is the fault of the monetary system and the supply of gold which, in sound money countries, regulates the supply of currency. They say that when gold gets scarce money gets scarce and the prices of commodities fall and we have hard times. Then where there is a big supply of gold and of money, the prices of commodities rise and we finally have a boom and hectic prosperity. They say that all we have to do is to go on a managed money system: increasing the supply when commodities fall, and decreasing it when the prices get out of hand on the boomside. It is very doubtful however whether the rise and fall in the It seems to be the theory of the majority of the managed currency experts that when the prices of commodities get out of joint it is the fault of the monetary system and the supply of gold which, in sound money countries, regulates the supply of currency. They say that when gold gets scarce money gets scarce and the prices of commodities fall and we have hard times. Then where there is a big supply of gold and of money, the prices of commodities rise and we finally have a boom and hectic prosperity. They say that all we have to do is to go on a managed money system, increasing the supply when commodities fall, and decreasing it when the prices get out of hand on the boomside. It is very doubtful however whether the rise and fall in the price of commodities is due even in a major part to the supply of gold. Certainly when values took a nose dive in 1929 there was no change in the gold supply or the supply of money. What happened was that our credit system collapsed. Nowadays most of our business is transacted through credit, and gold plays a small part in the volume of business. Again, it is not to be denied that the supply of commodities has something to do with their price. For example the recent rise in the price of wheat and grains was not due entirely to our going off the gold standard. The weather man played a big part in it too. The burning up of crops by the sun in the southwest, in the northwest, and in Canada had a great deal to do with raising the price. If you don’t believe this look at the price of hogs and other livestock, and compare the rise they have made in price with the rise in grain. There has been a big supply of hogs and they are still cheap, despite our going off the gold standard. In summing up the weak points and the difficulties ahead of a managed system of currency Prof. George W. Starr, director of the bureau of business research, Indiana University School of Commerce and Finance, recently said in a convincing article: "The chief objection to the theory of the all-commodity dollar is that it is based largely upon a fallacy in reasoning. The all-commodity dollar proponents definite the value of money in entirely relative terms; as the reciprocal or the reverse of the average of all commodity prices and then they conclude by some process, that the fall in commodity prices is caused by a raise in the value of money; changing from a relative concept of value to the absolute concept in the same argument. "No end of false conclusion may be reached by this process of reasoning, and by this route the all-commodity dollar proponents reach the idea that to raise prices we must debase our currency. "The fact that we may have an overproduction of some commodities, or that the trade in certain commodities may be hampered by exchange restrictions and tariffs, and subsidies by governments, or that whole groups may have their purchasing power curtailed by changes in the relationships among prices does not seem to be of any significance to the all-commodity dollar proponents. "History is replete of instances where prices have risen without change in the value of money, because goods rose in value, and of other instances where prices rose without a change in the value of goods, because money fell in value. "The value of money and the value of goods are two different things, and prices are affected by the relationship between these two values. Over long periods of time the value of gold may change, but these changes have been gradual, and as old gold stock becomes larger and larger, new acquisitions of gold will have less effect upon the longtime swing of prices. The gradual long-time changes in the value of gold is not the factor which causes..." "History is replete of instances where prices have risen without change in the value of money, because goods rose in value, and of other instances where prices rose without a change in the value of goods, because money fell in value. "The value of money and the value of goods are two different things, and prices are affected by the relationship between these two values. Over long periods of time the value of gold may change, but these changes have been gradual, and as old gold stock becomes larger and larger, new acquisitions of gold will have less effect upon the longtime swing of prices. The gradual long-time changes in the value of gold is not the factor which causes periods of booms and depressions; these are the result of the short-time rapid changes in the value of goods, and changes in the value of goods, and changes in the relationship among the prices of goods can not be eradicated by juggling the value of our money." LOOK TO THE SOUTH, UNCLE SAM Ever since our delegates escaped from the London conference without losing their diplomatic shirts, we have had reports of growing resentment against the United States. European nations are always sore when Uncle Sam does not sacrifice some of his assets for the sake of building up the continent across the Atlantic. One of the rumors has been that there might be a trade combination against us. Although this is somewhat far-fetched as yet, the government at Washington has apparently started a counter-movement in the shape of a proposal for closer trade association between the United States and the countries of Latin America. Regardless of whether there is danger of a trade combination against us in Europe or not, it is highly desirable that we cultivate closer relationships with South America. Former President Hoover recognized this when he made his trip around South America prior to his inauguration. The depression which came later, of course, postponed the possibility of immediate trade development with Latin-America on a large scale. But now that the subject can be taken up again it is to be hoped that the administration will not overlook the desire of more trade with Latin-Ameria. With few exceptions the nations to the south of us produce goods which we can take duty free, because we do not produce them at home and no American labor is thrown out of work by importing them. The few exceptions include the meat and grain products of Argentine and oil from Venezuela. So there is abundant field for the improvement of our trade relations with Latin-America. Let us not neglect the opportunity. As an Eastern newspaper well says: ANAHEIM GAZETTE OUT TO GET 'EM By Albert T. Reid "Latin America offers many opportunities. We are the most OBSERVATIONS "Latin America offers many opportunities. We are the most important customer of three-fourths of the states of Latin America. The greater part of their exports to the United States later free of duty, being staples such as coffee, tin, bananas and rice like, which do not compete with domestic production. There is a large market in Latin America, which depends largely on the use of world prices for basic commodities. That alone will improve the purchasing power of those countries. "A few facts stand out plainly. The international conference will not accomplish our purposes. Quiet conversations between two nations at a time can do far more to free commerce from its restrictions. Reckless lending to Latin American states does not represent a real increase of their purchasing power. As we accept more of their goods at higher prices, they are able to take more of our exports. But lending them money with which to pay from us, save in special cases, is not a sound procedure." CUBA LOSES ITS DICTATOR When the President of Cuba flew away from that unhappy island between two days, there was great rejoicing among the people. Cuba's troubles may not be over with the flight of President Machado. Doubtless there will be many factional leaders fighting each other for supremacy, and the probability is that there will be no permanent political peace in the island until economic conditions are greatly improved. But we hope an end has come to the regime of murder and lawlessness which has been so disgraceful in the past year or two. A large part of Cuba's troubles comes from the same source that a large part of our own trouble comes from — too many people taken off the land and concentrated into industrial cities, where they have no chance to do anything but starve when the factories shut down. In the old days in Cuba the sugar-cane growers were small, independent farmers, raising cane and delivering it at the mills under contract. But the big sugar companies bought up the lands and hired men to work them, more or less compelling the workers to live in the company villages and trade at the company stores. When the bottom dropped out of the sugar market and the mills shut down, these unfortunate workers had nowhere to go. That, we understand, is at the bottom of all the unrest in Cuba, but the situation was not helped by Presiden tMachado's hands-off" attitude toward all who tried to work out solutions to the difficulty. To Ambassador Sumner Welles we think a great deal of credit is due for bringing about the situation which caused Machado's resignation. There has been a good deal of talk about armed intervention by the United States. We hope that will not be regarded as necessary, and that the new Cuban administration and our own find means of cooperation which will benefit both... When the bottom dropped out of the sugar market and the mills shut down, these unfortunate workers had nowhere to go. That, we understand, is at the bottom of all the unrest in Cuba, but the situation was not helped by Presiden tMachado’s hands-off” attitude toward all who tried to work out solutions of the difficulty. To Ambassador Sumner Welles we think a great deal of credit is due for bringing about the situation which caused Machado’s resignation. There has been a good deal of talk about armed intervention by the United States. We hope that will not be regarded as necessary, and that the new Cuban administration and our own find means of cooperation which will benefit both nations. Indiana is just now celebrating the returning of draft beer which is another indication of how the psychology of the people has changed. Secretary of State Cordell Hull is said to be unable to see any general tariff revision possible in the near future. If he had listened to us he would have known that a year ago. We will continue to have faith in the code until somebody writes a popular song about it. We are in favor of putting the chiselers on less than a thirty-five hour week. The code for the home town knöckers ought to provide that they be equipped with rubber hammers that bounce back and hit them between the eyes. Nowadays a girl is still a flapper until she has to put on spectacles which contain bi-focal lenses, and even then she doesn’t always give up. The poet tells us that there is a destiny which shapes our ends but the average woman depends a little on the milliner and the shoe clerk. If Jim Farley really wants to do something to make his department popular why doesn’t he flavor the postage stamps with pearmint? The latest geographical definition of Kansas is a very dry body of land entirely surrounded by beer. Well if the price of bread gets too high we can go back to the old fashioned corn pone. SHOWING YOU THE WAY TO GO HOME Why can’t the several states pass a law stabilizing the value of land, according to its earning capacity. A town lot on a busy city street is worth more than one out in a suburban subdivision. Some orange groves are worth more than others. Cities and counties assess a town lot at a third of its approximate value—and the owner goes out and tries to sell it at ten times that figure. The optimistic promoter tells a gullible public that lots in his new subdivision will be worth, pretty soon, as much as a business lot in a thriving city. That’s speculation. It should be stopped. The get rich quick promoter tells the folks about his new town site and says the end of the rainbow is just around the corner. Stop that! COME INTO MY PARLOR SAID THE SPIDER TO THE FLY Every day in every way it looks like the playing with stocks is a dangerous pastime. Before the big blow up in '29 the boys had quite a time clipping the coupons; and then after running the stocks through the wringer too often the water was squeezed out and all that remained was just a dilapidated piece of paper. But the point is this. Just as soon as the big shots can arrange a new list of amalgamated door knobs the crop of suckers will again blossom forth and do the same thing all over again, and hunt for the hoottin’ nanny. DANDY WALLPAPER And then those German bonds that were liberated here, how in heck did they get by the watchman. THIS WEEK IN WASHINGTON The atmosphere of Washington as the "New Deal" begins to develop and take effect, is like that of an old fashioned revival meeting. Nobody would be surprised to hear any day the strains of "We're marching to Zion," echo through the corridors of any of the Government offices. There is an atmosphere of zeal, amounting almost to a holy fervor, among those who are trying to rebuild the nation in three years. For the job must be done before the next Presidential election or there'll be a new crowd in Washington running things. It is amazing to the practical, politically-minded observer, accustomed to a somewhat cynical outlook on the part of men who administer public affairs, to see hardbolled politicians joining with idealistic uplifters in the effort to change the whole system of business and industry to realize the entire social structure of 120 million people, in a hurry. The immensity of the task does not dismay them. It has been done elsewhere, they say, as in Italy and Russia; it is being done now in Germany; why not in America? This, the Last Stand The amazing thing is not that they are trying to do just that, but that such an overwhelming number of men and women are agreed that this social reorganization is essential to the salvation of the United States. As has been said, there is something approaching the religious in the fervency of their belief that unless the country is "saved" it will collapse into utter ruin. One of the stories that is being told here, which may or may not be true, but which illustrates this state of mind, is that one of the President's advisers remarked to him: "Mr. Roosevelt, if you put this new deal over you'll be the next President." And if I don't put it over I'll be the last President," he is reported to have replied. There are many others among the enthusiasts of the social revolution here who honestly believe that to be true; that if the present program fails we that direction. One group of his intimate advisers is strongly for this; another group including Treasury officials, is opposed to it. So it is likely that other means will be tried out first. "Customer goods" are moving more rapidly than they were a few weeks ago, but not fast enough to make merchants feel safe in committing themselves to the purchase of large stocks for Winter and Spring sale. They want to see the buying of the public become more general. So it is talked here that a big "Buy Now" movement will be the next general appeal from Washington to the people of the United States. It is sound enough advice, so far as it applies to goods not immediately to be consumed, for there is not the slightest doubt that prices will go up rapidly and to heights far beyond present levels, and that very shortly. But as to where the money is to come from, that is another question. That is worrying Washington, somewhat, since it would sit well with the public to have prices rise faster than purchasing power. And that is why the talk of dollar inflation persists and grows. See Hard Winter Ahead Somewhere in the inflation picture silver will figure largely, but there has been no intimation as yet what form this will take. The President is negotiating quietly with all the other nations interested in the silver situation, and in the meantime is saying nothing about it. The program of public works is getting under way, but it does not look as if more than a third of the three billion dollars authorized for this purpose can be got into action before next Spring. So, among other things, Washington is looking forward to another hard winter for the unemployed, with the necessity of providing more money out of the Federal, state and local treasuries than heretofore, since private funds for relief are pretty well exhausted and it is going to be harder than One of the stories that is being told here, which may or may not be true, but which illustrates this state of mind, is that one of the President's advisers remarked to him: "Mr. Roosevelt, if you put this new deal over you'll be the next President." "And if I don't put it over I'll be the last President," he is reported to have replied. There are many others among the enthusiasts of the social revolution here who honestly believe that to be true; that if the present program fails we shall face anarchy, communism, armed rebellion, disunion, and all sorts of horrors. One must understand the prevalence of that belief, and the spirit, almost fanatical in some cases, which prevades the whole Administration, to understand why methods which have heretofore been used only in war are being applied to the task of the reorganization of business and industry. Registering Progress The administration is satisfied that the program of re-employment and wage-rising under the trade association codes and the "Blue Eagle" agreement is going ahead as fast as can be expected, and is turning its attention to other phases of the recovery program. Three million men, it is estimated, will be back at work by September, but that is not moving fast enough, so inflation plans, to stimulate trade, are now being considered. Business is picking up, but not fast enough to provide complete relief before Winter comes so other means will be employed to get money into circulation and to make it circulate faster. Devaluation of the dollar would do this but the President is not yet decided as to how far he wants to go in TODAY AND TOMORROW By FRANK PARKER STOCKBRIDGE CHICAGO - doing itself proud From every point of view, the Chicago Century of Progress Exposition has proved a great success. I haven't seen it—yet; but my Chicago friends and many who have visited it tell me it is all that was expected to be and more. One thing which has impressed most of those I have talked with is the courtesy with which visitors are welcomed, by the city authorities and by the management of the Exposition. Some who drove to Chicago expecting to have trouble finding parking space near the Exposition, and timid about asking questions of the police, have given me glowing reports of the pains to which everybody went to help them, especially if their cars bore license plates from other states. house attic on a rainy Sunday I found another old coin which I had almost forgotten. It was a bronze half-cent piece, which had been kept as a curio from my boyhood. I don't know how long these half-cents were in use, but the one I found is dated 1851, and I can remember these coins being in occasional circulation in the 1870's. A coin expert tells me that they were first coined in 1793 and issued at intervals until 1856, and that they have no special value as rarities. The one I have is about the size of a quarter. I think it might be useful to coin half-cents again. Many articles are priced "two for a quarter" but to buy one costs thirteen cents. And a good many things that sell for a cent ought to be priced at half a cent! account of the notts. The only are twilight and left the farm stock hold on the who stayed on who grew up there. Yet and still movement started the average feller thumbs his way would forget all not too many lifts THE WAY HOME Several states pass a value of land, accomodacity. A city street is worth a suburban subdivision groves are centers. Cities and can lot at a third value—and the series to sell it at. The optimistic public that division will be much as a living city. That's not be stopped. The mer tells the folksite and says the just around the OLOR SAID THE FLY Away it looks like this is a dangerous big blow up in a time clipping after running the wringer too squeezed out and just a dilapidated point is this. Big shots can armalgamated door lockers will again the same thing he hunt for the LPAPER Norman bonds that show in heck did man. One thing which has impressed most of those I have talked with is the courtesy with which visitors are welcomed, by the city authorities and by the management of the Exposition. Some who drove to Chicago, expecting to have trouble finding parking space near the Exposition, and timid about asking questions of the police, have given me glowing reports of the pains to which everybody went to help them, especially if their cars bore license plates from other states. Also my friends have learned that Chicago's reputation for disorder has been greatly exaggerated. Knowing the city, as I do, I never had any idea that visitors would be subjected to the slightest discourtesy, far less danger; but a lot of other people hesitated to go to the Fair because they had read in the papers about Chicago gangsters. "Except for one or two automobile accidents, which might have happened anywhere, there hasn't been a single stranger injured or molested in Chicago this year," one of my newspaper friends there writes me, and he knows what he is saying. KEROSENE first for shale I had to drive fourteen miles, to the county seat, a while ago, to buy lamp chimneys; so general is the use of electric light that our village store stocks only one size of chimneys and sells few of them. It made me realize how times have changed since my youth when a young couple, visiting the farm for the week end, had to be shown how to light a kerosene lamp! They had never seen one. One of the great oil companies has discovered the unmarked grave of the first man to distill kerosene from shale, and is going to erect a monument in the Halifax graveyard to Dr. Abraham Gesner, who died in 1864. Dr. Gesner invented the word "kerosene" for his product of Nova Scotia bituminous shale, before the first oil wells were drilled in Pennsylvania. I can remember when many people in seaport towns and elsewhere still used whale-oil lamps, kerosene was so new and, in their judgment, so dangerous. COIN one-half cent piece Rummaging around in my farm- is dated 1851, and I can remember these coins being in occasional circulation in the 1870's. A coin expert tells me that they were first coined in 1793 and issued at intervals until 1856, and that they have no special value as rarities. The one I have is about the size of a quarter. I think it might be useful to coin half-cents again. Many articles are priced "two for a quarter" but to buy one costs thirteen cents. And a good many things that sell for a cent ought to be priced at half a cent! HUMOR ex-president code Now that he is out of a job, former President Hoover is letting his sense of humor express itself. "There is much talk about Codes," he said the other day, "but nothing has been done about a Code for ex-Presidents. So I have solved that for myself. I've reduced my hours of work to nothing and doubled my wages." He spends a good deal of his time, he said, looking out over the Santa Clara Valley, thanking Providence that he is in California. "Then," he said, "I sit down and think things over and spend the rest of the day laughing and laughing." FRIENDSHIP its test If I were asked to pick the one test of a man's character I think I would say that loyalty to old friends, or lack of it, was the best of all tests. What reminded me of that was the newspaper announcement that Montagu Norman, famous Governor of the Bank of England arrived in this country the other day to visit his old friend Mrs. John Markol, of Philadelphia, at her Summer home in Bar Harbor. When Mr. Norman was a very young man, hardly more than a boy, he was sent to Philadelphia to learn banking methods in the American branch of a great London bank. Alone and friendless in a strange land, he met Mrs. Markol who, as he has said to friends, was a "second mother" to him. That was nearly fifty years ago, and he went back to England after three years, to rise to the highest financial post in the British Empire. But he has never forgotten his American "mother" and visits her whenever he has the opportunity. Somehow, that gives me a lot of confidence in Montagu Norman's character.