Yesterday

President Roosevelt's latest pronouncement to the people at large reintroduces to the national vocabulary the magic phrase "Managed Currency," which means all things to all men; the number of interpretations which have flooded the press of the world leave one with a fascinating but somewhat blurred conception of the new plan. But whatever will be the economic effects of the proposed program on the American currency and the foreign exchanges, its major importance lies, I am led to believe, outside that narrow field. At the time when Roosevelt felt that the situation called for another radio lecture, two large forces were pressing forward for attention--Wall Street, and the farmers. The bankers in general, with their bristles stiffened by the Securities Act and the persistent references by the Administration to "the money-changers," have been passively hostile to the N.R.A., basing their coldness on the uncertainty of the business future. Washington has mixed veiled threats with saccharine disclaimers of socialistic intentions, but Wall Street seems still far from assured. And as a result the supply of credit which has been showered upon the banks has been left there, the managers simply stating that to loan it out now would be the equivalent of bidding it a permanent farewell.

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That is the first group which has been subtracting from Roosevelt's sleeping hours; the second is the farm bloc. A few days ago Governor Langer of Nebraska ordered an embargo on all wheat exports from the state, to be enforced, if necessary, by the militia; Milo Reno is organizing another general farmer's strike; there has been increasing sentiment built up for inflation. These were not casual outbursts, but evidence of the farmer's feeling that he has been excluded from the Recovery program, that his situation has become and is becoming worse through the growing disparity between agricultural and industrial prices. Even as popular a man as Mr. Roosevelt may have been not a little worried over the prospect of these good votes going sour.

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In these circumstances, the President saw the necessity of appeasing both parties with the same candy. To the farmers was to go the promise to raise prices further; to the bankers the pledge of a "managed" reflation followed by stabilization. It appears, however, that the bait tastes quite differently to different palates. Though the farmers may be slightly mollified, Wall Street is not. "The money-changers" are very unhappy about the whole thing. It goes against the natures of such simple idealists to be forced into the sceptic's position, nostrils dilated at the unpleasant aroma of a rat; but their hard business heads suspect that "managed currency" is just another slogan for that hardly defined but always suspicious phenomenon: inflation. The President is coming face to face with the sad fact that farmer and banker are betting on very different horses with no hope of a tie-race.

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The Pollyana prize of the week, which is donated by Pollux and myself, goes this time to Sir Arthur Salter for his brilliant research work of the past few days, the result of which enables him to find a sound basis for optimism in the future of Europe because Germany has not renewed her claims to the Alsace-Lorraine strip. CASTOR