Edgefield advertiser. [volume] (Edgefield, S.C.) 1836-current, 1921-02-23
Deaation is Impracticable.

Def1ation is Impracticable.
Reginald Mckennan, formerly f.
nancial secretary of the British
Treasury, now a director and chair
man of the London Joint City and
Midland Bank, Limited, an expert in
high finance, with broad vision of
world affairs, last week at a general
meeting of the bank stated, according
to the cable dispatches, that the Gov
ernment's proposed defatiqn policy,
involving dear money and rigid re-
striction of credit, was impractical
BILE.
Permanent monetary dehation, he
said, could be accomplished only by
a reduction of purchasing power,
which would necessitate a decrease
in the amount of the great war loans
outstanding. Curtailment of the war,
loans, in turn, would be contingent
upon paying part of the national
debt. This payment could not be
made by additional taxation, but by
economizing expenditures. "Any at
tempt at defation of this kind would
only end in the strangulation Of bus
mess and in widespread unemploy-
ment. Any premature attempt at
monetary defation by methods which
do not touch the causes which pro-
duced initiation must lead to disaster"
So speaks one of the foremost fl
nanciers of the world, and every
word that he utters is the solemn
truth. They have not sought to de-
fate in England as the hobby-riding
pawnbrokers of America have done.
While we were debating England was
still initiating, for productive pur-
poses, and getting foothold in trade
that will bring her back millions in
the days to come. They knew over
there that the sort of defation our
ameteur experimenter in the treasury
was practicing could only lead to dis
aster. They have seen the disaster
come. A government in Great Brit
ain that had arbitrarily Topped eight
billions from the value of domestic
agricultural prices in one season
would have been kicked out of Office
so fast that the cameras could not
have kept pact with it.
There is not an honest fnancier in
the world who does not know that
the scientific and honorable way to
defate is to increase production and
cut down wasteful cost in production.
Members of the Federal Reserve
Board repeatedly so stated. But that
process was not fast enough to suit
them. They knew that they had it in
their power to compel deflation by
refusing to let money be loaned,
without previous notice to the public
and without public warnings of any
kind, so they decided to go ahead on
that line, knowing the disaster that
would result.
When any man says that the panic
through which we have been passing
was inevitable, he is either financially
stupid or he has motive for pre-
tending what ne knows is essentially
not true. The return tolnormal could
and should have been orderly. 1t was
not orderly, but became rout, be-
cause Secretary Houston and the Fed
eral Reserve Board were overwhelm-
ed by their own propaganda and, by
confession of Governor Harding, in
September lost control of the sit
uation. Directors of private busi-
ness enterprise, on similar presen-
tation of facts, would Immediately
have been asked for their resigna-
tions had they not been sufficiently
appreciative of the properties to have
offered them Observation-Disclosures
turers Record.
Kean vour ewes and ears open