The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-03-28

lam.
THE delusion got its start il n
real case of reproduction 1t
seems to be reasonably clear that.
taking the world as a whole, too
much wheat was being produced in
the United States. That is to say,
the worlds demand for wheat could
be supplied more cheaply by farm
ers in other countries working
newer and cheaper land, and there
was, therefore, n substantial argu-
ment for assisting the wheat farm
ers to cut down their production
and convert their lands to other
uses.
Yet it has taken hold Of the
popular mind and of officialdom.
There is a general popular senti-
ment that unless production is cut
down we shall have ever-increasing
unemployment and ver-diminish-
ing profits. With this opinion pre-
vailing everybody comes to think
that the way to increase his own
purchasing power" is to produce
less so that he may have less to sell
so that he may sell at a higher
price.
BY this path we have got to CUR
present policy where the agricul-
tural adjustment administration is
trying to raise the prices Of things
the farmer sells, the national recov-
cry administration is raising the
prices of the things the manufac-
turer sells. Group of farmers, man.
ufacturerS, workers has become i'm
bued with the idea that if they can
charge more for their product they
will have more purchasing power. 1t
might work if they were the only
fellows practicing this policy. But
if everybody r~actices it at once the
result is a tendency to cancel out
everybody's gains.
XXTHAT the farmers have gained
w by the agricultural adjust
ment administration they have in
considerable degree lost in the
higher prices of NRA The higher
wages of NRA are counterbalanced
by the higher cost of living pro-
duced by the agricultural adminis-
tration and NRA. The increased
employment brought about by the
codes is counterbalanced by de-
ceased employment due to the de-
creased demand of consumers faced
with higher prices.
Were it not for the fact that the
monetary policy has kept a jump
ahead Of NRA and agricultural adj
justment administration by giving
agriculture and industry some quick
profits over fixed costs, we should
not be having as much recovery as
we are having. And it is a reason
ably safe prophecy that if the
artificial and monopolistic price
policies are not abandoned we shall
come into another stalmate, like
that Of September and October,
which will be overcome only by an
other dose Of monetary initiation.
BETWEEN the monetary policy
- of the administration on the
one hand and its price and labor
policies under MIRA, and in some
measure agricultural adjustment
administration, on the other hand,
there is a destructive contradiction.
The monetary policy, under which I
include both the revaluation of the
dollar and the nfationary expendi-
lures, really tends to produce re-
covery
How little that would have been
we can see by looking at France,
Holland, Switzerland, where such a
policy has not been adopted. That
we owe the bulk of our recovery to
it can be seen by the fact that we
have had just about the same
amount Of recovery as the countries
OF the sterling bloc which have re-
valued their currencies but have had
no general policy such as NRA.
The price-f1xing policies Of NRA
and agricultural adjustment admin
istratiCn on the other hand work
contrary to the monetary policy.
They raise costs ahead of profits,
thus discouraging enterprise; they
raise prices without increasing pro-
duction-in fact, by decreasing it
so that the real net income Of the
community tends to fall
IT becomes more difficult to sell,
L and therefore more difficult to
produce and therefore more difficult
TO revive business and employment
The monetary policy strikes at the
root Of the depression and is bring
ing about the cure. The price
policies Of NRA and agricultural
adjustment administration are in
essence an attempt to give every
one the position of a monopolist
who can charge all that the traffic
can bear.
But in SO far as every one be-
comes a monopolist, the effect is
to cause goods to be exchanged
very slowly. This may produce high
prices. But high prices without in
creased production are Of no benefit
to anybody. The railroads tried this
policy all through the depression.
They kept up their rates and made
it as hard as possible for people to
use their services.
They had wonderfully high
prices, together with brilliant pros