Imperial Valley press., 1944-11-06
Initiation Trend
Strikes at
municipalities
By ROGER W. BABSoN

bAbSON Z ann 4NAeis>Sss WV VI
mflaticn is the result of increasing
the currency or the debt OF the
country more rapidly than the as
sets of the country. Initiation is n
form OF disease which has started
from many different sources. Note
these five:
Il The CrudeSt form Of initiation
came from clipping coins This
means making them smaller or
thinner. t is the form that is still
used in certain countries.
- In the case OF paper money,
the same result is obtained by print
ing additional paper money without
increasing the gold reserve. This is
the method which is now being used
in the United States.
81 A similar result can be OBJ
tanned By issuing an excess of gov
ernmCnt bonds. which are really a
form of currency and which teEd tc
debase the currency already issued
a. Initiation comes through the
increased use of checks. notes and
other forms OF municipal, corpora
ton and personal Indebtedness.
When another man accepts your
handwritten check for $40, this
brings ln initiation the same as
printing more $40 bills.
81 Finally. a great increase in the
circulation OF money brings about
initiation. When money changes
hands three times as fast every
week. it has the same effect as in
creasina the amount of currency
OUTSTANDING bv threefold
DANGER PRESENT
Let me refer again to my defini-
ton. SO long as there is an increase
in the counuy'5 food. clothing and
shelter equal to the increase in the
circulating money, there IS nothing
to fear: but otherwise beware. To-
day. our outstanding currency IS in
creaSing more rapidly than is our
supply Of food. clothing and shelter.
Initiation has the same effect on
living costs rs changing the size
Of a bushel. or changing the length
Of a yard stick, or changing a gallon
measure would have if the price per
bushel, per yard or per gallon re-
mains constant This is q very i'm
porrant factor for all municipal Of
ffcia especially fire chiefs-tc
keep in mind when the nation is
facing a postwar boom.
After World War II initiation will
show itself in increased price of
finished products such as road ma
chinery. crushed rock, fire trucks
and especially fire alarm equipment.
Furthermore. these inc e a ses S
caused by inflation-Will be in addi-
tion to the natural price increases
due to greater demand and general
prosperity. In fact. all the things
which cities will need after the war
can be bought for less now.
MORE IMITATION
In case some one argues with you
that further initiation is not coming,
give them the following three rea-
sons:
q Government expenses are still
in excess Of government receipts.
In order for the government TO pay
its bills. it must either print bonds
c. currency.
p Debtors will continue to howl
for more initiation This applies to
farmers. real estate promoters and
some merchants who owe money.
They know that as prices of the
land. houses and goods which they
now own 90 UP. it will be easier for
them to sell and get out of debt
80 Those engaged in foreign
trade are usually anxious to have
the U. s. further deYalue its dollar.
When other countries devaluate,
countries which do net lose trade.
Initiation is a temporary stimu-
liant to business: but, like Whiskey.
its stimulating effects last for only
a short time. Sooner or later in
r7ased prices offset all advantages
temporarily secured by q cheap dol
lar" Hence, to refer again to fire
"A In the postwar period, there
will ha a General rise in the price,
OF all materials which municipali-
tics purchase. This means that the
sooner fire departments purchase
new equipment ami extend their fire
alarm systems the better off the
cities will be- Furthermore. only
common i'stice demands an in
crease in firemen's wages.
tB) As the effects Of initiation
become recognized there will be q
demand BY real estate owners. |
and others for greater
'ire protection When ii costs more
70 replace property, the owners Of
and merchandise will be /.
more fearful Of fires and more anX- .
ious for greater protection. There /
fore. city officials can now talk in /
flation to their cifizens with the full .
support Of all property owners.
Saws HIGHT TThI BEST
FOC SY'7pEOGY LISTENER