Evening star., 1919-11-09
Urge Policy of Shame.


A somewhat vociferous school Of po-
litical economists is trying to convince
the country that the present leve
of prices should be accepted as fixed
and immutable, and that the thing to
do is to hurry up and adjust our busi-
ness and fiscal affairs on a 50-cent-
dollar basis.
All right. If that is the thing to do,
let us be about it. Suppose we start
with federal, state and municipal in
debtedness contracted prior to war
initiation days. The governments
federal, state and municipal-issued
their securities and got in exchange
honest-to- goodness dollars, in each
one of which there was a hundred
cents of value as expressed in terms
of food and fuel and clothing. These
dollars had been earned by honest
toll and saved by frugal living. Each
dollar, at the time it was earned,
would have bought bushel of wheat,
say, or perhaps two bushels of po-
tatoes. Each dollar was put aside in
expectation that. when future need
arose, it still would buy bushel of
wheat or two bushels of potatoes 1t
was, in reality, wheat and potatoes,
and not merely tokens of their value,
which the frugal toilers loaned their
governments.
A 500 prewar municipal bond,
therefore, is an acknowledgment that
the municipality received from John
Smith 100 bushels of wheat and is
pledge that at the expiration of a
specified number Of years it will pay
the hundred bushels Of wheat back to
him. And the inducement which per-
suaded John Smith to lend his hun
dred bushels of wheat was the promise
of the municipality that each year it
would pay him four bushels of wheat
as interest.
Already, as a result Of war infla-
tion, the interest return has been re.
duced to below two bushels Of wheat
a year; and if, at maturity of the
bond, the municipality insists upon
discharging its debt with something
less than fifty bushels Of wheat, John
Smith is going to believe that he has
been made the victim Of q crooked
deal.
And what is true of federal, state
and municipal bonds is true of the
pre-war bonds Of railroads and in
dustries, of life insurance policies, of
real estate mortgages, Of money in
savings banks, and all other forms
Of investment with fixed interest re.
turns and fixed maturity values. If
we are going to stabilize things on
the present level, common honesty de-
mands that the interest return, as
expressed in dollars, shall be doubled
on every pre-war investment, and that
at maturity two dollars shall be re-
paid for each one dollar represented
in the original loan. Any other
course would amount to reputation
of the half Of every debt, and would
operate to penalize and discourage
thrift.
The aforementioned economists do
not suggest such a safeguarding Of
investments, and in view Of their con-
tention that sterilization at present
levels is the easier way we are war
ranted in assuming that it is not con-
templated in their program. Whether
stabilization at present levels would
or would not be the easier way must
be conceded debatable question, for
the world never has had opportunity
to judge Of the difficulties attending
a swindle so gigantic as the one pro-
posed. But the easier way is not
necessarily the safer way. There
could be no permanency to a pros
perity founded upon billions of dol
lars plundered from the aged, the
widowed and the orphaned. The bare
suggestion is monstrous, and to carry
out such a policy would make the
present generation the most shame
full one in history.