Washington, November 21, 1933

Many people are inquiring what they ought to do about their money; whether, for instance, they should join the flight of capital to foreign countries. Naturally, they ask for information from Washington, because the key to the future is presumably in the minds of government officials.

While very little is said for publication about the administration's intentions as to the raising of gold prices or inflation, the fact remains that the night of capital is just about as dangerous a piece of speculation as betting on the future.

The safest place for the American dollar is at home. Just what should be the form or kind of investment made is another thing, but any experimenting with foreign exchange holds risks for those who are not familiar with such transactions. It is not believed that the banks are encouraging a flight of capital. They are presumed to be withholding any advice that leads to an export of money.

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The possibility that the administration may stabilize the dollar suddenly, or that gold may be sold for a few days instead of being bought, would have a bearing on exchange quotations. Thus a stampede abroad to buy American dollars might follow an indication from the government here of a plan to stabilize the dollar.

Under such circumstances many American owners of money in Europe would want to bring their funds back to the United States and would sell their francs or pounds to get dollars. The result would be a jump in the price of the dollar and a decline in the pound and the franc. This change might be happening at the very moment the funds of some luckless individuals were being sent out of the country. Indeed, the export of capital in times like these is a form of speculation, which has in it all the dangers that any speculation of chance-taking transaction may encompass.

Unquestionably there is a lot of gambling in foreign exchange going on and undoubtedly many frightened owners of money have taken precautions to sell American securities, believing this was the safest course. But the very removal of hundreds of millions of American capital has not helped the financial situation within the United States. The return of capital must some day be brought about in order that a healthy situation may be restored.

Too much emphasis has been placed by the government here, of course, on the influencing of the price level through gold purchases. If it were not for the psychological disturbance caused by tinkering with the gold price of the dollar, there would be no real harm in the experiment. The value of gold is not changing in terms of foreign currencies, but it is varying from day to day in terms of dollars. Can the United States force up the price of gold measured in all currencies, including those of gold standard countries?

The belief persists among the experts who are conducting the government's experiment that it can be done. Actually very little gold is available for purchase. If all the newly mined gold were acquired by the American government, it would not amount to an average of $5,000.000 a week. The governments or central banks of the world hold virtually all the gold, and they will not part with it, even though a slight premium may be paid. Nor does the United States want to force the importation of gold held by France or Britain. We have more gold now than we need as a basis for currency issues.

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So the administration's gold maneuvering amounts to a corner on the newly mined gold of the world. But it is not affecting as yet the movement of gold owned by the various governments. There have been some large transfers of gold from Paris to London recently, but this is believed to be wholly due to the French budgetary situation, and fears that France may be compelled to leave the gold standard.

With the uncertainty prevailing all over the world, the best place for the American dollar is at home. And there are plenty of ways to invest it, all the way from real estate in attractive locations of American cities to the buying of articles or commodities which must be used in what are known as consumable goods, as well as in the shares of companies that will be doing a profitable business long after the inflation panic in over