New-York tribune., 1921-01-30

undoubtedly be an emphatic yes.
II, however, the same question were
submitted to the millions of persons
living On comparatively fixed salaries
or wages who still have full time en-
ployment, to the many producing or
selling goods whose prices have not yet
materially declined and whose markets
have not yet greatly suffered. to the
persons with large financial interests
in railways and public utilities the
prices of whose services have either
been recently increased or kept fairly
constant by public regulation. while
wages and costs of material ere tend
irG downward; if the question were
sabmitted to persons and institutions
dependent for a livelihood upon fixed
funded incomes from bonds, preferred
stocks, annuities, pensions and the
like, in all such cases the vote would
pyObabiy be an emphatic no. Ap-
rarent self-interest would lead them
to say "let the good work of defation
20 on"
For the millions who have strong
interests in both directions, the deci-
sion would not be so clear. The vote
in such instances would depend upon
which group of interests seemed to
pYedominate.
To the extent that we permit polit
zeal pressure exerted by the personal
interests of the moment to control our
defation program, class and personal
interests of this type will be the i'm
portant forces in determining how far
and how fast we shall debate.
Not Far Enough
Turning from the question of the
selfish interests of different economic
classes to the somewhat broader but
feIated question, Has deflation gone
far enough to undo the admittedly
great injustice caused by half decade
and more of war time imitation, we
must answer, no. From 1918 to the
peak of high prices in the spring Of
1920, the cost Of living in the United
States somewhat more than doubled
and wholesale prices increased on the
average by 172 per cent; while in most
levels increased many fold. In the United
Kingdom the price level for wholesale
prices increased more than threefold,
in France nearly sixfold, in Italy seven
fold. Much greater were the increases
in Germany and the territory covered
by the old empire of Austria Hungary,
for which satisfactory price index fig-
ures are not available. And then there
is Russia. For all these and other
countries, the values of accumulated
funded savings, as measured in pur-
chasing power, were correspondingly re-
duced. including the values of savings
bank deposits, of bonds, mortgages,
paid-up insurance policies, etc. Such
little declines in prices as have so far
taken place in most European coun-
tries represent but petty fractions of
the advances that took place after 1913.
From the peak of high prices in 1920
to the latest date for which figures for
average wholesale prices are available
Wholesale prices in the United King
dom declined 16 per cent, as against
price rise of 213 per cent There has
been decline Of IA per cent in France
cent: q decline Of 2 per cent In Italy
against a previous advance of 579 pei
cent; and in Japan, where a financial
peuic and depression have caused g
great slump in prices, the decline from
the maximum in March, 1920, to the
minimum in October, 1920, was only
so, per cent; j. e., from a maximum
index number of 321 to minimum Of
226.
Obviously. however, no amount o.
dedation could undo a very large
proportion of the hardships that in
~fiation caused, for the personnel o.
the different economic classes has
greatly changed since 1918. There have
been large changes in the ownership
Of bonds, mortgages and savings banl
deposits. Many Of the savings of pre-
war years have been spent under thu
pressure of the high cost Of living, o.
invested in farms or other enterprise
at inflated war prices, or lost in spccu
lofi~a in fO the dis
graceful get-rich-quick appeals to th'
public that have been rampant of late
Defation to pre-war price levels
would, of course, undo some of tn,
evils Of past imitation. This would b.
largely true of individuals and institu
tions whose longtime investment
have changed little since 1918, Of thos
whose savings deposits have remaine'
substantially intact, and of govern
ment employees, teachers, preacher
and others whose salaries change YER
slowly with changing price levels.
Injustices, of Course
But in preventing the injustice =
these classes that will otherwise b
caused by past imitation, dehation t
anything like pre-war prices woul
produce It's own crop Of injustice t.
persons who have incurred long-tim
ueDtS curing the PERIOD OF initiate
prices, to those who are and will b
large taxpayers, while our great wa
public debt is being paid off, but VIII
hold small quantities of governmen
bonds, and to the millions upon whor
continually declining prices would i'm
pose the hardships Of much unemploy
I ment.
For these reasons It would be d,f
heuit to justify a long-continued defa
tion solely for the purpose of undoin
or avoiding the otherwise ineyitabl
hardships that past years Of infiatio
must cause.
The presumption Is always a stron
one in favor Of the maintenance G
the existing price level, becaus
stability Of value is the great desider,
tum In the monetary unit, changes
value in either direction always worl
ing hardships.
Why, then, deAate further7 For IL
aii-tmportant reason that moderated
stable unit OF value in which the publ
has "a go-ahead" confidence is a par,
mount need Of modern economic soc
sfy, and that, with ali its shortening
the gold standard is the only mopetar
standard with which the world IL fami
iay that IL both even remotely stable
value In ordinary times and within tn
feld OF practical politics for world u,