If the truth be known, the government there has no gold policy except to drift from day to day in the hope of finding a "natural" level for the dollar.

Curiously enough, this is not an unfavorable development provided the discovery of a stable point for American currency is not postponed too long. The readiness of experts to pronounce the first week's experimentation in gold buying a "failure" does not take into account the desire of the administration to ease itself into a free gold market by gradual stages.

It can be stated positively that the purpose of the American government is not to engage in a contest with foreign currencies, though, to be sure, this may be the inevitable result of the decision to buy gold in London or elsewhere. By this time foreign governments and central banks know the United States has no designs on their currencies and is chiefly concerned in raising the domestic price level.

The first step--to buy newly mined gold in America--was a preliminary to the buying of gold wherever it was mined. The next step will be the expression of a willingness at the proper time to sell gold if it would assist in keeping the markets from fluctuating too widely.

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What President Roosevelt seeks is a "managed currency" which is first of all a true reflection of domestic prices, and, secondly, a foreign exchange quotation for the dollar that removes speculators from the scene. If there is, so to speak, to be any large buyer or seller of gold, it will be the American government itself. This means that the President has simply added one more important factor to the many elements which he has brought within his control since he asked Congress to leave the situation to him to handle as he thought best, or found wise.

Now since this formula has never been tried before it would be a mistake to judge it on the record of a few days, though it does indicate clearly the difficulties involved.

America can control the world gold price and force the British pound to a different level and even the franc from its moorings. But when this has been achieved, the real point at issue will be whether American commodity prices have been materially improved. Those that are international, like wheat and cotton, will go up as does gold. Other products will depend in the future, as in the past, on the demand for them. And demand depends on confidence and spending power, both of which have not yet come with full force in the domestic program of the administration