The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-09-15
INSTALLMENT VI


"A 1894, there has been some
reaction from the highest points
touched, and some now believe
that the NRA policy has failed:
they whisper that it has now ex-
hausted every possible ruse, and
that now a new relapse must be-
gin. especially as numerous
strikes are occurring (a) on the
part of workers who want higher
wages and a larger share in pros
perity. and ID in the hope of get
ting industrial trade unions estab-
hshed so as TO secure a stronger
bargaining power for labor IN
the forthcoming era of relation.
These factors need not, however,
cause great alarm. Most Of the
strikes which have occurred, or
been threatened, are in industries
where profits already have re-
vived, and the workers, not I'M
naturally. are in search of higher
wages.
Whereas the attempt to secure
pan-industrial trade Union recog-
ton, although new TO America. is
merely a development which oc-
CURED in England eighty years
ago. The disturbances caused by
all strikes are regrettable, but
collective bargaining may eco
nomically further the administra-
tons plans by keeping consumer
purchasing power rising some
what parallel with prices and pro-
duction.
AS regards the talk of another
new slump now following the re-
cent minor revival, this, 1 think,
can be regarded as merely the
talk of uninstructed economic
opinion.
The truth is that in every trade
cycle economic progress takes
place not in one steady line, but
by leaps, reactions, stagnation
and new leaps. Sharp upswings
are followed by temporary falls;
then after a period of quiescence
the upSwing is renewed. The
United States at the moment ap-
pears to me to be nearing the
end of a period of reaction, and
after a short dormant period a
new upswing should commence.
IT is true that in actual practice
Il the recent period of industrial
reaction and hesitation has been
longer than normal. but then the
previous advance in the middle of
1888 was also considerably more
rapid than normal. 1t was, more
over, only to be expected that the
rapid upswing, coupled with the
jolts caused by new legislation,
should have caused considerable
price diSlOcation and industrial
disharmony, and leo to some fric-
ton with labor.
The monetary driving forces be-
hind the forward movement, how
ever, are as strong as ever, al
though to explain the driving
forces at work some reference
must be made to pure monetary
theory. The reader. I hope, will
forgive me for this, but money
and its flow are really the root of
the problem.
AS explained heretofore, al
though nonmonetary factors may
touch off a slump, depreSsions in
the end always tend to assume an
almost purely monetary form.
Nonmonetary remedies such as
tariffs, naturalization. ETC., may
do much to bring the country
from depression to prosperity;
nevertheless in past trade cycles
slumps have. as it happens, al
ways have been cured by the
gradual growth Of a condition of
redundancy of money; that is
to say, by a growing unnecessary
surplus of money" in the pass
books of the public and in the
reserves of the banks.
In most past trade cycles this
redundancy has been brought
about naturally" by declining
prices and trade, i. E., by trade
and prices diminishing even faster
than bank credit currency is con-
tracted lowing to people hoard
ing more money through nerv-
business. and using more of it as a
store of valued A similar re-
dundancy can. however, be "arti-
flcially" created by deliberate in
flation of bank notes or deposits.
THIS artificial" creation is