The Waterbury Democrat., 1941-07-21
PROF. FISHER
 OF YALE WARNS
America Drawing Closer to Imitation; Must Take
 Steps to Stop It
BY JACK AMMAN United Press Staff CorrespOndent)

United Press Stan Correspondent)
 New Haven, Conn, July 21. (UP) America is approaching an infia- tionary period which from now on will be injurious" unless immediate steps are taken to check 1t, Prof Irving Fisher, world famous flna1- cial authority and economist. said in an exclusive interview with the United Press today.
 Increasing purchasing power which hitherto has increased pro- duction," Prof. Fisher said, cannot continue to 6o so indefinitely, pro- ductive capacity is being approach ed, so that any further increase in purchasing power must raise prices, including the most of living" For years" the former new deal brain-truster said, ''the country has been warned of imitation, without realizing that 1t has been going on ever since the bottom of the depres- sion. In March, 1888, May index number of wholesale prices stood at 55 per cent of the 1926 level. Now 1t Is 95 per cent Tn other words wholesale prices have risen over 70 per cent.
 Good, Thus Far
 up to the present this imitation has done good. But from now on imitation will be injurious"
 "The fact that the country fears imitation provides the only hope the economist said" that something may be done. Ordinarily, nothing is ever done until it is too late"
 The efforts of Price Administra- tor Leon Henderson were not favor- ed by Prof. Fisher. Such govern ment regulation" he said, unless confined to a small number o1 articles concerned with defense would, I fear, do very much more harm than good"
 The retired Yale university pro lessor, who is still hard at work on matters of economies and finance made these recommendations.
 Master Key
 "The master key to the problem Is generally overlooked. This is the volume of deposits subject to check It has been increasing rapidly, and apparently is destined to increase still more rapidly in the immediate future, because of big defense ap- propriations.
 "These appropriations mean more government debts, more government bonds sold to banks in return for deposits, newly created, subject to check, new purchasing power put into circulation without correspond ing increase of goods to be bought herewith.
 "The most appropriate remedy and preventive would be to stop the sale of bonds to banks" He urged continuing of the excellent idea of selling bonds to the public "who pay for them with pre.existine money instead of with newly created money"
 Another Proposal
 Another helpful proposal is tha of J. Maynard Keynes and one whicl has been adopted in England, to ta1 heavily but to have much of thu tax repaid after the war. So far ai we can pay for defense by taxes in stead of loans, the less the imitation because then no new money is ere. ated.
 "Still another proposal is for g progressive tax on spendings. This would have the advantage over the Keynes proposal of being more nearly voluntary.
 Tt would have the same advan- tage, and even more, over the ex- else tax on luxuries. Anyone would be free to buy anything, but would have to pay penalty tax the more he spent. which means the more luxuriously he lived.
 "The luxury spendings tax seems the most promising and the least harmful method. It would greatly nklx,o,YIafa eayiY1oc %