The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1933-04-27
What About Imitation

to the farmer, the small town business man and
their creditors?
Friends and enemies of the imitation program
which seems certain to become law have such varied
views the subject that average citizens have
to be sup in the air" on the question
Leaving out the questions of gold standards, sterl
ing dollars, cheap money fiat currency and all the
other terms which muddle the matter in the minds
of most of U.S. we interested only in results-boh
immediate and later.
Mild imitation such have since the gold
standard discarded week has resulted in great
ly increased prices farm prices Besides being de-
c:dedly encouraging, the result has been increased
incomes potential incomes for the farmer holding
produce. Increased incomes have allowed farmers to
buy of things they needed but were forced to
get along without while prices approximately
half what they AS a result merchants have
experienced revival of business very pleasant after
long quiet spell. Now they must order goods,
cutting down the surplus of manufactured products
and setting the wheels of industry in notion giving
employment to many potential buyers of farm products
Is there anything vicious about this circle?
Of course congressman must have some opportuni-
ty to make speeches and there are many lanes for
them to get off on, of which apply while others
only to apply.
Why couldn't all this happen while
the gold standard? This is not simple but it
be explained
With most nations off the gold standard, and
printing deprecated currency at various degrees of
by foreign producers. We have been led to believe
that our exports fell off because of depression and
because other countries could not afford to buy from
The truth is that they continued buy but they
bought elsewhere yet they sold their products profit
ably here further Cutting markets and depressing
prices Why?
Garet Garrett, writing in the Saturday Evening
Post, gives clear answer:
Let the be that of British manufact-
urer of shoes He makes pair of shoes to
sell in Great Britain for pound sterling.
When the gold value of the pound sterling
was $4S6, it made no difference whether he
sold that pair of shoes in London for pound
sterling in New York for $4.86 But since
depreciation, the gold value of the pound sterl-
ing having fallen one-third, there is differ
ence If he sells that pair of shoes in London
he will receive only pound sterling, but if
he can sell it in New York for $486, he will
receive the equivalent of one and one-third
pounds sterling. That is to say, formerly, if
he brought home his $486 from New York. he
could exchange it for simply one pound ster-
ling, whereas now, he brings home the $4.S6
received for the shoes in New York, he
exchange it for little than pound
and six shilngs.
Then let this British shoe manufacturer be
in need of leather. Will he buy It in the
United States? Obviously not, because he
would have to change his pounds back into dol
lars at discount of one-third to pay for
American leather Instead he will seek his
leather in some depreciated-curency country
where the buying power of the British pound
sterling is unimpaired.
But we have tariffs the ant-infationists say
When currencies become inflated to certain point it
becomes profitable for the foreign manufacturer to go
the tariff wall with his goods Tariffs can be
raised it is true. When they are the foreign nation
again depreciates its currency and climbs the wall
again The only way to fight imitation is with infia-
tion. The gold standard very satisfactory ar
rangement long were all on it. The amazing
thing is that government was unable for many
months to how were getting whipped because
we remained on it.
The reason farm organizations were early expon-
ents of of imitation is obvious Other plans
proposed for farm relief were more complicated but
they intended toward the end. The farmers
problem is to get for his produce, whether the
be allotment debenture land leasing to reduce
production any one of a dozen schemes.
Assuming that farm prices par with
prices of things the farmer wished to buy hey have
not been) the farmer who out of debt could have
gotten along quite nicely. But most farmers like
chants have certain amount of debts either land
buildings, seed other things not essential Most
of these debts contracted when prices high
As the price of produce umped the payments became
increasingly difficult to make. Debtors paying
off debts contracted when dollar actually worth
dollar with dollars worth up to two dollars in
par;son with prices of commodities It is mystery
why the debt load became staggering many farmers
and merchants lost their land businesses and homes.
The again is either to scale down the debts,
complicated problem, to initiate the money to its
old value, allowing the creditor to receive just what he
loaned This applies to the business man who is debt
as well as to the farmer.
The only real danger was that congress might
prepare the imitation measures and push them through