The Birmingham age-herald., 1923-01-04
THE LESSON OF DEFLATIoN

Now that the depression due to the de- flation is passed, it may be profitable to review some of the phases of the process and to learn whatever lesson it has for the nation Inevitably some were harder hit than others. Some even benefited from de- flation. For example, those who borrowed when the value of the dollar was low and paid when the value became greater actually paid more than the face of their obligations. In similar manner those who lent money when the value of the dollar was low and received it back when the value of the dol lar was greater profited by the deflation process. Under our monetary system such a result appears inevitable. The cure lies change in our monetary system as in a sys- tematic effort to control fluctuations in money. Deflation is the reaction to infla- tion. The area or extent of deflation is equal to the area or extent of imitation. The best way to control deflation is to con trol imitation. If those who lend money profit by deflation, they lose proportion ately by imitation, just borrowers who lose by deflation profit by imitation. In 
 Among those who lost heavily by defla- tion were the farmers. The reason is not because of any studied national program of mulcting the farmer. It is because in the past, the farmer has been most helpless in the face of financial emergencies, and the easiest to take advantage of. Luckily for the farmer and everybody else, that situa- ,. .oI,,o for,o 1i,,,y his forces and resources in such a co-opera- tive unit that he is no longer a prey to every fluctuation in our economic condi- tion, but is able to exercise the same con trol over his financial destinies as is exer- cised by organized industry and business. The secret lies in organized buying and sell ing of farm commodities and farm require ments. It lies in the measured and orderly marketing of the farmers wares in ac- cordance with the markets demands and for price that will return a profit to the producer. Every other business operates on that basis, and now the farmer adopts it.
 In the past, at harvest time, the farmer has been expected to pay his debts. Ac- cordingly, no sooner has he taken his crop from the fields than his creditors look to him to sell it and turn over to them the amount owed them. This has meant gen. eral dumping on the market of entire yields of practically all regular farm crops. The price has immediately gone down in the face of this tremendous offering, and often the farmer has had less than the cost of his crop to show for yhis seasons effort and expense. In the meantime, those who have had access to ready, capital have bought heavily of farm products to hold for the expected increase in market value. These spectators in farm commodities are the ones who have reaped the profit the farmer would otherwise have enjoyed
 Under the cooperative plan the farmer can turn his crop over to his association and borrow against it whatever money he may need for immediate use. The association feeds the crop to the market according to demand and price, refusing to accept price below the cost of production. Thus the far mer, still retaining title to his product until its sale, enjoys whatever profit accrues from this systematic program. In the future the farmer will not be the butt of every finan- cial emergency that may strike the nation. He will bear only his proportionate share of deflation and will by his orderly policy lend his influence against tendencies to- wards uncalled for deflation,