Evening star., 1933-11-23

of imitation, Lee would never have sur
rendered at Appomattox. Also, you note
that the Senator says in both cases
could not have been avoided. That is
just the point. Initiation could not have
been avoided because the respective
governments spent more money than
could be raised by taxation and could
pay their bills in no other way than
by printing money.
Frof. Fisher condemns all such argu-
ments as these as emanating from
bankers. who have had their chance
and failed He opposes them by series
of categorical assertions.
II cannot refrain from meeting this
form of argument on its own ground.
In early March. 1929. my own father,
Paul M. Warburg, issued public warm
taking place in the security markets.
That was months before the crash came.
Presumably, my father would qualify
es one of the bankers. who Prof. Fisher
would say had their chance and failed.
Certainly, can vouch for the fact that
he believed in the fetish of a gold
standard and did not believe imitation
could be controlled.
On the other hand, I wired my Office
today to see if I could get the exact
quotation of a few other categorical
statements that Prof. Fisher made in
the past. May I read you the following
telegram, and apologize to Prof. Fisher
If he Is in any way misquoted:
Quotes Statements.
Following obtained from bound copies
New York Times covering 1929: On Sep
tember S, following Babson announce
ment that stock market crash was COM
7 nxDf T7,-
ing statement: Stock prices are not too
high and Wall street will not experience
anything in the nature of a crash.
On October Is, Prof. Fisher declared at
a public address that stock prices had
reached what looks like permanently
high plateau On October 81. he said
that even in the then high market the
prices of stocks had not yet caught up
with their real values. He explained that
| the market was not inflated. but only
had been readjusted to the decreasing
value of the dollar and the increasing
/ pace of production and trade He said ::
In my opinion current predictions of
heavy reactions affecting the general
level of securities find little if any
! foundation in fact On october %
! he said: Fears that the price level of
stocks might go down to where it was
in 1928 or earlier, engendered by recent
breaks in the market value of securi-
ties, are not justified by present eco
nomic conditions Four times during
1929 he made the New York Times with
the declaration that prohibition was a
success and that our then prosperity
VS. due in large measure to it
| i apologize to Prof. Fisher if dig
ging up the past seems like hitting be-
low the belt. but I think it is about time
some one showed that the bankers are
net always wrong and the professors
not always right"
Declared Rise in Prices.
Continuing Warburg said:
'Depreciating the currency means
raising all prices by making things sell
fer more dollars. To do that cannot
possibly eliminate the discrepancy be
tween farm prices and other prices.
That is why l say that the policy of
laising prices by depreciating the cur
rency is an action of doubtful value to
very small minority of the popula-
ton and an action which does def
mite harm to large majority of the
population. That is why l say that it
is like burning down the house to burn
the letter
When we abandoned the gold stand
ard. we did so with no intention Of
abandoning it forever. and to my mind
the doubt never should have been al
lowed to arise as to whether we were
6olng to return. Unfortunately, infla-
zionist theory was given a stimulus by
the speculative rise of prices which took
place in the first few months of the
experiment. This led to the conclusion
that if a little depreciation would do
so much good. more depreciation must
do more good. 80
Il shall close by stating a very simple
credo. I believe that the American
constitutional form of government and
their present fundamental system Of
economy; that is an economy based
upon the reasonable expectation of
profit from work or enterprise
Il believe that the American people
want reform within the limits of the
basic principles of this economy and
the elimination of abuse wherever pos
sible.
Il do not believe that the American
people want a planned economy such
as we see evolving in some European
countries in which the state as the in
itiative and human beings become regi-
mented taxpayers.
There can be no compromise be-
tween these two basic conceptions of
economy, if am right in my assump-
tion as to what the American people
want, then there is no one single factor
which today stands more in the way of
recovery than a monetary policy Of ex-
perimentation with the kind of money
we are going to have and uncertainty
as to the ultimate limit of depreci-
alton"