The Washington times., 1932-11-02
Our l8 Months.

Our ! 8 Months.
The Uniontown bank was obviously victim first of
deflation and gamer, later, by initiation It went
through the process in 18 years which every mothers
of has experienced in the past 18 months, and
wish that had neat little figures, like those of the
bank to make clear to what happened. under
stand why economists sometimes mysterious; like
doctors they would like to write their prescriptions in
Latin so that the vulgar herd would not peer too
closely; But politicians are the very people who ought
to make economics clear to and they haven't done
their duty. #
For instance what campaigner has made it crystal
clear that during the 1881 and part of 1892 every
who had borrowed money in 1923 was paying back
than he borrowed Or that the operations of the
various banking enterprises and corporations created
last year, every lender will get back somewhat less than
he lent? Who has told that defation which went
on for year favored the man with steady income
ana was actively dangerous to the who got
job but had to regular insurance premums
The Hat Trick
Suppose you landlord and had the luck in 1928 to
sign up tenant for five years at $500 month In
1881 and 1882 your tenant paying $500 month";
but with $500 you could buy 80 hats instead of rs in
1928. The figures rough but defation is rough
going altogether Your tenant had his salary reduced
from 81 500 month 1000; he could buy hats
too If he had any money left over but paying you and
insurance and interest a mortgage little house
in the country and nsalents left him very little with
which ne could take advantage of the fall in the price of
hats. ,-..,
He asked you to reduce the rent by the proporonate
sum OF five hats. You would gladly have done this
warm-hearted landlord that you are, but you had a
MORTGAGE
In 1928 your $1,5OO bought the mortgage-holder 1875
hats today it buy $50 hats. Somebody is ganing
somebody is able to buy far too many hats.
The Cainer
The man who is gaining is the who lent money
five years ago. to build sound studio in the movies a
shoe factory, house. Or the old lady who had all
her money packed away in Liberty Loan bonds and was
getting $500 month from the insurance company in
memory of her late husband. The amount of money she
gets is exactly the same; but what she buy with it
is much more.
Naturally, people with fixed income people to whom
others owe great debts look with dspeasure initiation
1t makes them lose their lovely 10 20 per cent ad
vantage On the other hand, the man who has to pay
debts thinks initiation is bully He still pays $500 in
rent or interest but easier get hold of and his
$oOO IS back to 25 hats instead of 30 Those five hats
make difference
The Danger Line.
To comfort the collectors of borrowed money one little
point be made They could only gain deflation up
to certain pointhe point of bankruptcy. Imagine if
you large bank which poured ten millions into
movie concern the picture people couldn't pay back
because ten million began to be worth twelve or fifteen
million and the pictures not making money If they
paid five million back to the bank, the five million was
worth seven and half but if they couldn't pay another
cent and went bankrupt the loss all around was pretty
serious. ~ F'''
Deflaton went since the crash in Wall Street. #
enoed last June, or at least it checked Now is the
time Tor all good men to come to the aid of the marty
M