BUILDING A BREAKWATER

Mr. Hoover's appearance in San Jose superior court challenges the attention of the whole nation, and particularly those who look after other people's money. If the guardians of Stanford's funds are worried by the bogey of inflation, Harvard's trustees should sit up and take notice. For all save the government's hirelings will now admit that serious inflation looms larger than at any time since the administration took the helm.

Aside from the obvious aspects of a stock boom, inflation cheapens the currency and raises the cost of living. Rocketing prices will swiftly impoverish any organization depending on bonds and mortgages, yielding as they do a fixed interest. Income will no longer command the goods and services needed to continue operations.

Since inflation means hard times for the bond holder, the traditional hedge is to buy stocks and real property. Ultimately such equities will rise in proportion as money is devalued. Columbia, for instance, has shown beyond cavil the wisdom of owning land. Not only have they milked their mid-town properties in Manhattan of fat yearly rents, but rising values have increased their original investment many fold. The trustees of Harvard should take a long thought about such forms of protection when they start investing their newly acquired millions.

Up to the present time the administration in Washington has done more to advance the flames than control them. True, the President seems unlikely to devalue the dollar further. But rapidly mounting deficits, which have saturated the banks with unused credit,-witness the bonus,-endanger the college funds just as much as devaluation undisguised. If the present trend continues unabated, a large part of the endowment may ultimately go up in smoke. The responsibility for avoiding such a disaster rests squarely upon the trustees.