New-York tribune., 1918-05-30
Inflation-The "Times' "New Brand

l.
good thing. Wherefore, in its endeavor
to follow in all things the Presidents
leadership, it found difficulties. After
considering the matter, and upon due re-
Election, "The Times of yesterday was
moved to say:
"The President will find unanimous sup
port in condemnation of inflation"-
Not all imitation, of course but:
"of the sort which he condemns Butt
This is serious matter
ut will not escape notice that he con-
dones another sort of imitation which he
practises"
There are, then, "The Times" dis
covers, different kinds of infation And,
in it's opinion:
"The latter imitation is the worse of the
two"
The President had said bluntly and
fatty:
Enormous loans freely spent in the
stimulation of industry Of almost every
sort produce inhations and cxtravagances
which presently make the whole economic
structure questionable and insecure and
the very basis of credit is cut away"
The President, in brief, had spoken of
only one kind of infation-the only kind,
up to "The Times's" discovery, that
apparently had been in the minds of econ
omists and fnanciers; namely, credit in
fation. "The Times" does not agree. It
says:
ut is open to question whether there is
any considerable credit imitation, if allow
ance is made for the contraction of credit
in the manner of the regulation of the
railways and all public utilities
"The laws have been enforced against
some thirty billions of capital in a manner
which has reduced their credit more
billions than the banking credits have ex-
panded, perhaps"-
Meaning thereby, apparently, if there
be meaning at all, that the loans of the
railways and public utility corporations
have been reduced by an amount of one,
two or three billions. Recently" says
"The Tines"
The Tribune has been publishing dia-
grams showing that the credit of public
utilities OF all the sorts subject to regula-
ton also has fallen below the credit of
the lndustrials, and that both are above
the credit of the railways
1t therefore Declares:
Here is represented contraction of
credit as we'll worth notice as the inf1a-
tlon of credit SO generally condemned.
Railway credit is being improved by
the increase in rates and industrial credit
Is being lowered by the prospect that
profits of scores per cent will be reduced
by taxation"
"The Times" goes on:
without excusng credit imitation of
the obnoxious sort, it may be said that
the harm it does is rivalled by the dis
turbance of all prices by wage imitation.
In that sort of imitation the government is
leading offender"
The reference here is not to an advance
of railway wages by three hundred
millions, but
TO the labor snatchng' which made the
advance Of railway wages necessary. The
result is that some sorts of capital and
labor are inflated at the expense of other
sorts of labor and capital, the latter sorts
being unable to protect themselves be-
cause OF the governments regulation of
markets"
Finally, the "Times" panacea:
Imitation ubove the market rate for
money should be checked, and that is
within the power of the Federal Reserve
Bank by its control Of the credit market.
Inc Federal Bank officials need no in
struction on that point"
We are sure that here our neighbor is
a +1,o4 u
Federal Reserve Bank will need a great
deal of instruction on this point-even
Mr.. Paul Warburg, "whose WRITINGS"
says "The Times"
have shown ample appreciation of the
dangers of imitation in theory"
And not merely Mr.. Paul Warbure and
other of the economic thinkers of the ADJ
mlnlstration, but, we apprehend, econo-
mlsts and financiers in general. We are
sure that they, and possibly many read
ers of "The Times," not endowed with
this writer's rapidity and lucidity of
thought, will be deeply anxious to learn
precisely what initiation "above the mar
ket rate for money" might mean.
FOR our own part, we are lost in won
der as to what "The Times" imagines is
represented by the idea of imitation at all
When the President talked about inAa-
tion and its dangers there was no diff
Guilty in understanding precisely what he
meant. He meant credit inaation-infla-
tlon that raises prices while it tends to
lower the actual production of goods.
When Mr.. Paul Warburg wrote his ad-
mirable paper on initiation, republished in
these columns month ago, there was no
difficulty in understanding precisely what
Mr.. Warburg meant. He meant exactly
the same thing as the President meant
When Professor Irving Fisher and the
Committee of the American Ecnnor.;.