Flutter

"Do you think, sir," President Roosevelt was asked one day last week at a regular White House press conference, "that domestic commodity prices have gone far enough to justify stabilization?"

As every correspondent expected, the President emphatically did not think so. Embroidering on a pet subject, he went on to declare at some length that the purchasing power of the new dollar was not yet in line with the burden of old private debts. Because he has said the same thing over & over again during the past two years, few White House reporters saw any newsworthiness in his casual words.

Instead of sticking strictly to a discussion of prices, however, the President used the word "dollar," which rings like a gong in the ears of every banker, broker, businessman and speculator in the U. S. All was quiet on the floor of the New York Stock Exchange when the routine White House story was slowly tapped out on the news ticker. As soon as the brokers spied the word "dollar," a mighty shout uprose: "Devaluation! Roosevelt plans to devalue the dollar some more!"

Instanter a dull market became a buying bedlam. Stocks soared, shorts were squeezed, new crowds appeared in brokers' boardrooms. Government bonds cracked, endangering the current $2,400,000,000 refunding operations. Foreign exchange markets in London, Paris and Manhattan were suddenly overturned as the dollar plummeted. Pound sterling, which had been sinking alarmingly for days, shot up 5 1/2-c- to $4.78 in a few moments. The U. S. Stabilization Fund desperately dumped hundreds of millions of francs.

All this monetary excitement quickly returned to the White House over the Washington City News Service ticker. President Roosevelt wrathfully summoned Press Secretary Stephen Early. Press Secretary Early in turn summoned the White House correspondents, sharply told them that the President, in his "off the record" talk about money and prices, had no intention of implying further dollar devaluation, that the market's interpretation of his words was entirely wrong.

Down crashed stocks and foreign currencies even faster than they had gone up. The whole financial flutter lasted only an hour but all except the nimblest traders were mightily whipsawed. And after trading relapsed into the usual doldrums and stock prices shuffled off to new lows for the year, Wall Street remained unconvinced that the President's remarks were entirely without purpose. A new case of business jitters was clearly registered in the Government bond market, which during the rest of the week not only failed to recover but extended its flutter losses.

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