New-York tribune., 1920-09-01
Who Restricted Employment +?

Gompers throws his imagination
into the struggle for four years
more of paternalism gone mad. He
says-naturally he is even less
specific than Mr. Cox was about
his $15,000,O00 drcam--that employ
ers are closing plants and throwing
men out Of work in order to forco
them to vote as he thinks all capi-
talists want them to.
1t is an absurd charge. Mr.. Com
rers ought to know better. Frank
, ~, We have sufficient respect for
his intelligence, even after this
latest outburst, to believe that he
does know better. Perhaps he has
reason for believing that a Cox ad-
ministration woulL cater to the .
per cent of the population Mr.. Corr
pcrs represents, at the expense of
the 81 per cent, and therefore is not
overscrupulous.
The facts about unemployment
arc plain enough. 1t was not pro-
duced by mysterious Republican
capitalists seeking votes nor by
Democratic ones, either. 1t is moth
ing more than the unacceptable re-
suit Of the present Administrations s
policy of unlimited imitation to
finance the war, supplemented by it's
campaign, conducted through the
Federal Reserve Board, to bring
about defation in all arbitrary way.
Under the Wilson Administers
tons policy of unlimited imitation
the volume of money and credit was
suddenly and enormously expanded ;
and it is an economic law that the
volume of money times it's velocity
will always equal the quantity of
goods available to be exchanged
times the average price. Therefore,
when billions of new money and
credit were pumped into circulation
the cost Of living bounded suddenly
upward. For a time war restric-
tions held prices down somewhat,
but once the restrictions were lifted
the rise started at a dizzy pace.
There was tremendous boom.
Labor demanded and received wages
that, seemed fantastic, but which
were yet scarcely more than enough
to meet the rising cost of commodi-
ties. Unfortunately, labor also cut
working hours and the quantity pro-
Guced in an hours work. In time q
stage was reached where people with
fat pocl.etbooks were bidding
against one another for a diminish
ing supply of goods.
Although no one could clearly see
where it would all end, it is likely
that the situation would have cor
rected itself in time had there been
no interferences. Economic prob
lens have a way Of getting solved
through the operation of natural
laws that the Administration has
refused to recognize. Sterilization
Of wages and prices on high level
was by no means beyond the range
Of possibility.
But the Administration, apparent
ly in a panic as it contemplated the
results Of it's unlimited imitation
policy, decrecd through the Federal
Reserve Boars that we must have
dehation. Accordingly a campaign
was launched against expansion of
loans. and for contraction of loans
made for "ron-essential" purposes
the board refusing to specify which
should be regarded as "non-essen-
tial." The plan was to apply press
ure gradually and to ease up when
ever things assumed a threatening
aspect. In that way the Admins
tration hoped to bring about deha-
tion slowly and without hurting any
body much.
At first little heed was given to the
warnings issued by the board, bat
after a while the effects Of the new
policy began to. show. Wall Street
was confronted one day with tie
J, highest rate for money in years.
and securities toppled and fell with
, crash from which they have not
yet recovered.
, Having accomplished so much
the authorities proceeded to other
lines. They determined that loans
, on commodities, and particularly
goods held in warehouses, must be
, reduced, and to lend force to the
program rediscount rates, which are
, the interest rates paid by banks
, for the money they borrow to lenS
) business men, were raised sharply
, not once, but several times.
, Meanwhile, the Administration
and particularly Attorney General
; Palmer, was conducting a wordS
[ campaign to create distrust ir
prices. Over and over again it wa: