Excerpts from the Press Conference

THE PRESIDENT: What is the news?

Q. There has been some talk again about inflation. I don't know . . .

THE PRESIDENT: How do you define inflation?

Q. I don't know what it is. (Laughter)

THE PRESIDENT: Neither do I. I have gotten to the point where even a cigarette tastes bad.

Q. That is a sign of a cold?

THE PRESIDENT: Yes, it certainly is.

Has the State Department given you the social program yet?

Q. Yes, it has.

THE PRESIDENT: That is the only news of any real importance that I know of.

I will tell you another thing there is today. If I were writing a story, here is the way I would put it: I don't know whether you can hear me at the back of the room—my voice isn't particularly strong this morning, since I have a cold. If I were going to write a story, I would write it along the lines of the decision that was actually taken last Saturday, but which really goes into effect today, by which the Government will not allow the exporting of gold, except earmarked gold for foreign Governments of course, and balances in commercial exchange. That is for straight movement.

The whole problem before us is to raise commodity prices. For the last year, the dollar has been shooting up and we decided to quit competition. The general effect probably will be an increase in commodity prices. It might well be called the next step in the general program.

Q. In other words, let the dollar take care of itself?

THE PRESIDENT: Yes, let the dollar take care of itself by protecting it against foreign currencies, and letting it seek its own natural level instead of trying artificially to support it.

Q. This policy would raise prices here at home. On the agenda of the International Conference there is an item for raising prices all over the world.

THE PRESIDENT: Right.

Q. Can you give us any background on how that would be done internationally? By your policy it would be done nationally, but how would it be done internationally?

THE PRESIDENT: Of course, this really is a constructive move in the sense that it puts us in the same position with nearly all the other Nations of the world. We start on the same footing; and because we are such a large Nation, it ought to emphasize the necessity for all Nations getting together on a more stable basis.

Q. Yes?

THE PRESIDENT: It is a constructive move. It is a little bit like what happened nationally. What we had to do last March was to clear away the dead wood. We had been heading for a bank smash-up for a long time and what we did was a drastic thing, which was to clear away the dead wood and start afresh. Now, this is along the same general line. It puts us on a par with other Nations, and it is hoped eventually that it will aid somewhat to raise prices all over the world. However, as to what the actual details of that will be or the methods to be pursued, we don't know yet. There have been half a dozen different suggestions made. That is one of the things we are talking about.

Q. Can you explain the process by which this would tend to raise commodity prices here at home?

THE PRESIDENT; Here is a simple illustration: There are a good many commodities which are sold in terms of world trade. Well, for instance, cotton. Cotton is sold on a gold basis and, with the dollar where it has been, it works out to a certain number of cents. Therefore, if the dollar were to sell off l0 percent, the price of cotton in terms of dollars would go up 10 percent. . . .

Q. Have you any other ideas in mind on this so-called inflation or reflation as to the steps to be taken?

THE PRESIDENT: Nothing else. I think on the general subject, it is awfully difficult to particularize.

It is a little bit like a football team that has a general plan of game against the other side. Now, the captain and the quarterback of that team know pretty well what the next play is going to be and they know the general strategy of the team; but they cannot tell you what the play after the next play is going to be until the next play is run off. If the play makes ten yards, the succeeding play will be different from what it would have been if they had been thrown for a loss. I think that is the easiest way to explain it.

Here is a team that has a perfectly definite objective, which is to make a touchdown, so far as commodity prices go. The basis of the whole thing really comes down to commodity prices. And, this is entirely off the record, the general thought is that we have got to bring commodity prices back to a recent level, but not to the 1929 level except in certain instances. You take, for instance, city real estate in 1929. It was then altogether too high, and you ought not to bring city real estate back to the 1929 level. That is obvious. On the other hand, farm commodity prices were comparatively low in 1929 and have been going down since rather steadily for five or six years. So that it has got to be a definitely controlled inflation, because the man on the street does not understand it any more than the average banker understands it. It has got to be a controlled price level.

Q. Mr. President, is it still the desire of the United States to go back on the international gold standard?

THE PRESIDENT: Absolutely; one of the things we hope to do is to get the world as a whole back on some form of gold standard. . . .

Q. Is it all right for us to use that line about controlling the price level? You had been speaking off the record.

THE PRESIDENT: Yes, I think you can use that with the very definite thought in mind that we have to raise the price level but keep it from going too high.

Q. You spoke of some form of international gold standard. Does that imply the possibility of a lower gold content in the monetary units of the world?

THE PRESIDENT; Well, I would not put it that way. One of the things they are talking about—the economic end of the conference-is a different gold ratio, a different gold reserve to currency. You see, the old standard was 40 percent and there is talk of changing that ideal 40 percent standard, which was the old ideal, to something else.

Q. Would you describe this as another step toward a controlled or managed currency?

THE PRESIDENT; Currency? Yes, but I think you ought to couple with that the effort to get a more controlled credit, because the two go hand in hand.

Q. The public works program will fit in this general campaign sooner or later, will it not?

THE PRESIDENT: Oh, yes, and, by the way, entirely off the record, do not write stories about five or six billion dollars of public works. That is wild. In other words, the public works program will be as much as we can usefully use between now and next spring. There is no use attempting to go ahead with a program of projects which will require all kinds of engineering in the first instance and with the actual employment unable to start for a whole year. What we want is the type of public works that will put people to work immediately—get them to work as soon as possible.

Q. Is that off the record?

THE PRESIDENT; I think you can use that.

Q. That won't be so much, then.

THE PRESIDENT: It won't be five or six billion dollars. I have no idea, but it will not be anything like that.

Q. It won't be much more than a billion?

THE PRESIDENT; We are looking over the field and seeing how many public works there are that are practical, useful, self-sustaining as far as possible, and that can be started quickly. There is a limit to that.

Q. Where did you get your cold?

THE PRESIDENT; I don't know; I think I got it from talking too much. . . .